What is life insurance?

What is life insurance?

Annuity and life insurance policies offer their customers guaranteed benefits in old age, for example in the form of a monthly pension or a one-off capital payment. However, both products are more than just retirement provision products.

Life insurance combines the benefits of a private pension plan with financial security for dependents - right from the start of the contract. In addition, customers can protect themselves against risks such as accident or occupational disability.


Unlike private pension insurance, life insurance integrates financial protection for surviving dependents from the outset.

What does life insurance provide?
With endowment life insurance, the customer can provide for retirement and at the same time protect his dependents. The customer receives a one-off sum insured, which is made up of the premiums paid in, the guaranteed interest rate and the surpluses generated by the company. The guaranteed interest rate is currently 0.9% and applies for the entire term of the insurance contract.



- Endowment life insurance combines retirement provision with survivor protection.

- Guaranteed benefits offer old-age provision with a high degree of security. Insurance companies offer their customers a guaranteed retirement capital benefit and, in simple terms, a guaranteed interest rate on the accumulated capital of currently 0.9%. This applies for the entire term of the insurance contract. In addition, there is a surplus participation.

- Additional modules such as occupational disability or accident insurance can be included in the same contract.

What to look out for when taking out a life insurance policy
A life or pension insurance policy is a decision for many years - so you should be very well informed about your pension needs. And about how much you can afford to pay in premiums over the long term.

Private pension and life insurance policies are offered in many variants. Everyone can choose the product that best suits their personal needs. Even current contracts can often be adapted to a changed private or professional situation.


Insurance application

The insurance application determines the rate and scope of coverage. The applicant determines how high the sum insured or - in the case of an annuity insurance - the monthly pension should be. He also decides whether the insurance coverage of the main insurance is to be supplemented by additional insurance, such as occupational disability insurance. Those who wish to automatically increase the premium and benefits of the insurance during the term must usually also note this in the application.


Premium amount

The amount of the insurance premium depends on several factors. These include:
the amount of the desired sum insured or the monthly annuity
- the state of health
- the term of the contract
- the sales and administration costs.

But also the additional insurances cost money and decide on the premium amount. Here, the age and state of health of the insured person, risk-relevant hobbies and the fixed sum insured are decisive.

Insurance premiums can be paid monthly, quarterly, semi-annually or annually. If annual premiums are not paid, installment surcharges may apply in some cases.

Automatic increase in insurance premiums
The automatic increase in premiums (dynamic) ensures that the sum insured “grows” over time. The premium and sum insured increase at regular intervals - either by a specific, contractually agreed percentage or by the value by which the maximum contributions of the statutory pension insurance increase.

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