InsuoraTerm life insurance in Germany: the basics
The German Risikolebensversicherung (term life or risk life insurance) is a pure protection product: it pays a fixed lump sum to your named beneficiaries if you die during the policy term. If you survive the term, nothing is paid — there is no savings element, no cash value, no endowment. This simplicity makes it the most affordable way to protect a family against the loss of a breadwinner.
Germany distinguishes sharply between Risikolebensversicherungen and Kapitallebensversicherungen (whole-life or endowment policies). The latter blend death cover with a savings product. German consumer organisations (Verbraucherzentrale, Stiftung Warentest) have consistently advised against Kapitallebens as a savings vehicle — particularly in the low-interest-rate era — and recommend separating protection (Risikolebens) from savings (ETF, Riester, BAV occupational pension).
What the German state pays: DRV survivor benefits
Any employee contributing to the German statutory pension system (Deutsche Rentenversicherung, DRV) generates survivor benefit entitlements for their family:
- Große Witwen-/Witwerrente (55%)
- 55% of the deceased's pension entitlement, paid for life to a surviving spouse who is over 47, caring for children under 18, or incapacitated. An income-testing rule reduces the payment if the survivor earns above a threshold (around €1,000–1,200/month net, depending on the year), but the basic entitlement exists as long as the conditions are met.
- Kleine Witwen-/Witwerrente (25%)
- 25% of the deceased's pension entitlement. Paid for 24 months only to survivors who do not meet the criteria for the große version. This short payment window is the key gap that term life insurance fills.
- Waisenrente (children's pension)
- 10% of the deceased's pension per half-orphan (one parent alive), 20% per full orphan. Paid until age 18, or until age 27 if the child is still in education or training. This partially covers children's living costs but not higher education or exceptional expenses.
Your personal DRV projection is in your annual Renteninformation letter (sent automatically from age 27 onwards) or accessible via the DRV online portal. The letter shows your expected statutory pension and contains survivor benefit projections you can use as input for this calculator.
Occupational pension death benefits (BAV)
Many German employers provide a Todesfallleistung (death benefit) through their occupational pension scheme (betriebliche Altersvorsorge, BAV). Typical values range from 1 to 3 times annual salary, but this varies significantly by employer, sector, and collective agreement. Some larger employers and civil service positions offer quite generous group cover — which significantly reduces the need for private term life insurance.
Ask your HR department for the current value of your Versorgungszusage. The BAV death benefit is usually tax-free for the named beneficiary up to the statutory limit.
Self-employed people: a critical gap
Employees who have been contributing to the DRV for at least 5 years gain survivor benefit entitlements. The self-employed who are not in the DRV system (Freiberufler, many Gewerbetreibende) accumulate no statutory survivor benefits at all. They must cover the entire family protection need privately. This makes term life insurance particularly urgent for self-employed people with dependants.
Tax and inheritance considerations
The death benefit of a Risikolebensversicherung is generally subject to German inheritance tax (Erbschaftsteuer) if it forms part of the estate. However, naming an unwiderruflicher Bezugsberechtigter (irrevocable named beneficiary) directs the payout straight to that person outside the estate.
The tax-free allowances are generous for close family members: €500,000 for spouses, €400,000 per child. A policy under €500,000 named to a spouse is therefore typically free of inheritance tax. For larger policies, a Über-Kreuz-Versicherung (cross-ownership arrangement) may be tax-efficient for unmarried couples — each takes out a policy on the other's life. Consult a tax adviser for your specific situation.
The underwriting process
All term life applications in Germany require health declarations. Pre-existing conditions (cardiovascular disease, diabetes, history of cancer, mental health conditions) can lead to premium loadings, exclusions, or rejection. Before formally applying to one insurer, consider using an independent broker to run an anonymous risk pre-enquiry (anonymisiertes Risikovoranfrageverfahren) with multiple insurers simultaneously — this shows you which insurer will accept you on what terms without creating a record on your insurance application history.
Frequently asked questions
- Is this calculator free?
- Yes — completely free, no account needed. Everything runs in your browser and nothing you enter is saved.
- Do I need life insurance as a single person in Germany?
- If no one depends on your income and you have no joint debts, the need is minimal. Exceptions: joint loans (shared mortgage with a sibling or partner), or if you financially support parents or other family members. For singles with no dependants, income protection insurance (Berufsunfähigkeitsversicherung, BU) is often a higher priority than term life.
- What is a Restschuldversicherung (mortgage life insurance)?
- A Restschuldversicherung is a term life policy with a declining sum insured that tracks your mortgage repayment schedule. It is specifically designed to cover the outstanding loan balance. Banks often bundle or push this product when granting mortgages. Compare it carefully against a standalone term life policy with a constant sum insured — the constant version is sometimes cheaper and more flexible (it covers the mortgage AND any other needs your family has).
- Can I cancel my German life insurance policy?
- Yes — usually terminable annually at the insurance year end with the required notice period. There is no surrender value; premiums paid are not refunded. You can alternatively put the policy on premium-free status (Beitragsfreistellung), which reduces the sum insured but keeps some cover in force without further premium payments.
- Are German life insurance premiums tax-deductible?
- Risikolebensversicherung premiums are classified as Vorsorgeaufwendungen (provision expenses) and can be included in the overall cap for deductible insurance contributions. However, for most employees, the cap is already exhausted by statutory health and pension contributions. In practice, few taxpayers get additional tax relief from life insurance premiums. Consult a Steuerberater for your specific situation.