Yes, certain premiums/contributions are taxed on the legal basis of the Insurance Tax Act.
In Germany Insurance Tax is a so-called transfer tax and the annual revenue amounts to slightly more than 10 billion euros, thus accounts for more than 4% of the Federal Tax Revenue.
Depending on the type of insurance the tax rate varies. Below a listing of private policy:
|General insurance tax rate||19.00%|
|Building insurance, incl. fire||16.34%|
|House Contents insurance||19.00%|
|House Contents insurance, incl. fire||16.15%|
|Life insurance (pension plan)||0.00%|
|Personal Accident insurance||19.00%|
|Personal Accident insurance, incl. premium-return guarantee||3.80%|
|Property insurances in general, (e.g. motor, liability)||19.00%|
Before the 21st of December 2012 men and women were paying different insurance premiums. The European Commission decided that it was discriminatory to apply different rates to different genders so all insurance premiums were adjusted so that the costs of both genders were made exactly the same. This inevitably resulted an increase to the highest common denominator rather than decrease to the lower one!
Since unisex was introduced, men have now to pay a larger sum for: Health insurance, Incapability to Work (Loss of Income), Critical Illness cover and for their Pension. On the other hand women have to pay a larger sum for car insurance and life assurance. The costs for liability, house contents and building insurance are unaffected.
Since the 21st of December 2012 bi-sex tariffs are no longer offered by German insurance companies. If you set up a bi-sex policy before the 21st of December 2012, you can still keep it, but any subsequent changes will result in a Unisex tariff being imposed.
Deductible, also known as 'excess' and in very few cases 'participation', is the amount of money that has to be paid by the policy holder before the insurer reimburses any insured expenses.
The majority of property insurances have a free selectable deductible, which is related to a single claim. The policy holder can even pick a zero excess but looking in the Terms & Conditions one will often find that a single benefit still might have a fixed excess regardless.
Contrary to property ins. health or medical insurance does not have a claim-related but annual excess. Depending on the insurance company the excess might be linked to the insurance-year or calendar-year.
"A specified monetary amount payable by an insured person in respect of expenses incurred before any benefit is paid under a policy. The policy excess applies per person, per policy year.”
Should a client deliberately violate his duty of disclosure during the application procedure a German insurance company has the following rights if he, on knowing about the actualities, would have declined the proposal or only agreed to acceptance using different terms.
These rights do not have to be carried out but in the event of a pending claim associated to this offence are 'standard procedure'.
As of the time of the transfer, i.e. when the buyer is registered in the land register under section 1 (German: Grundbuch, Abt. I) and therefore, officially owns the property, the insurance can be terminated within one month and with immediate effect (special right of termination).
If the purchaser is unaware of the existence of a building insurance policy, the policy can be terminated within one month after becoming aware of its existence. This rule also applies where the purchaser has not received notification of the registration in the land register until expiry of the before-mentioned 1-month notice period.
The answer to this question is: "Yes, but with exemptions!"
For this to make sense, one must understand the difference between the following 2 categories.
Thanks to cross-border digital data exchange switching from one EU statutory (“public”) health company to another requires in most cases nothing more than submitting an application to the German provider of your choice.
The same procedure applies to those few countries not connected to the data exchange system too, yet in written form.
No. When visiting a doctor, dentist, public hospital or any other non-private medical facility, presenting your membership card you will not be billed.
Invoices are only ever issued when treatment, consultation or service exceed the scope of "public" health cover, hence the patient needs to be billed privately. Latter requires preliminary clarification and the patient's written consent.
Although nowadays one would not think, gender reassigment is still a very complex subject, and especially in Germany.
Due to the German Constitutional Court ruling in 2011, that a person needs neither sex reassignment surgery nor sterilization in order to legally change their gender, and because of the immense expenses involved in gender reassignment surgery, ultimately carried by the insured community as a whole, the following requirements are needed for a statutory health provider to give their approval.
On top of the total 243.5 billion Euros that providers of "public" health insurance paid out in 2018, members made additional co-payments of approx. 4.2 billion Euros for treatments, services, benefits, medication and the below mentioned. Compared to 2017, this is an increase of 108 million Euros!
Here are just a few examples of the co-payments that people must expect with German "public" health insurance.
|Contraceptives and Abortions|
|Hospital stay and treatment|
|Medicines & Dressings||"waived if a minor"|
|Prevention and Rehabilitation benefits|
|Remedies and Aids|
|Transportation with an ambulance||10€ per trip|
|Treatment Care and Home Nursing|
For adults co-payments are limited to 2% of their gross annual income and for those who have to see a doctor more often or need frequent medication, i.e. chronically ill people, the co-payment limit is lowered to 1%.
The amount self-employed/ freelancers must contribute towards the German statutory health insurance scheme is a fixed percentage, plus the providers own 'Additional Fee', both based on income.
Income is defined as turn-over minus expenses, includes other possible sources of income, e.g. capital yields, rent, etc. and is to be proven to the provider every year by presenting the most recent Tax-Income Assessment.
To prevent contributions being infinite the so-called "Contribution Assessment Ceiling" (Geman: Beitragsbemessungsgrenze) is applied, which makes sure contributions are capped at an amount that is reviewed annually.
In 2020 this is set at 56,250€ per year or 4,687.50€ per month.
Finally the system then differentiates between 2 types of members and therefore applies slightly different percentages.
14.0% Medical insurance
x% Provider's additional fee (current market: 0.3% to 2.5%, depending on provider)
3.05% Long-Term Care insurance
Total = 14.0% + x% + 3.05%
Member is 23 years or older and has no children:
14% Medical insurance
x% Provider's additional fee (current market: 0.3% to 2.5%, depending on provider)
3.3% Long-Term Care insurance
Total = 14.0% + x% + 3.3%
With the average 'Additional Fee' currently at 1.2%, self-employed members can calcuate with 18.25%, resp. 18.50%.
In the event that self-employment has only just started, thus a tax-declaration is yet to be submitted, the health insurers fall back on reliable economic evaluations (German: Betriebswirtschaftliche Auswertung [BWA]) or try to make their own estimates, in expectation to make amendments once the first Tax-Income Assessment can be presented.
Regardless however of the amount of income the self-employed might expect and declare towards the provider, monthly contributions are generally calculated in accorance with 2 thresholds.
In principle, statutory health insurance comes with a twelve-month commitment period, yet depending on any optional tariffs that may be included, the binding period can be extended up to three years.
The notice period required to terminate the contract at the end of the month is two full calendar months.
Employees in a German "Midijob" are those whose monthly salary is periodically within the transition bracket of 520.01€ - 2,000€ (status: 2023). The advantage of a "Midijob" is that employees contribute a lot less towards Social Security Insurances than those earning over €2,000.
To obtain insurance cover, you must first submit an insurance application to the insurer. If approved, a legally binding contract is then concluded. "Legal" means that the applicant has received the acceptance confirmation - usually the policy and other contract-relevant documentation - and the 14-day withdrawal period has expired.
Private health insurance companies can reject applications.
However, since 2009 when in Germany compulsory health insurance was introduced, private insurers must accept every person who is not subject to mandatory insurance, i.e. those who are forced to sign up with a statutory health insurance provider. These people are then placed in the private so-called and "Basistarif" and because any pre-existing medical condition is insured, it is very expensive, yet with very basic insurance coveage.
If you have given up your residence or centre of life in Germany you have an extraordinary right of early termination, and providing evidence within two months of departure the insurance contract can be cancelled retrospectively.
Your German insurer will need the following for each insured person:
Important to understand is that to comply with German health insurance legislation, the insurers must sustain coverage if prerequisite for early cancellation is not given!
For an insurance plan to be substitutive in Germany, legislation defines the following.
On the basis that the employee's health care meets the requirements of the German Social Insurance Act, Book V §257 (2a), employers must contribute towards their staff's private health insurance, namely the medical- and long-term nursing care tariffs. The subsidies are legally regularised and beause the calculations that determinate the maximum payable are not easily comprehensible, we suggest to remember the following: Max. 50%, considering the following caps.
Employer’s monthly contribution ceilings 2023:
|Long-term Nursing Care:||76.06€|
As of 01.01.2009 all German insurers are obliged to certify the so-called “Übertragungswert" that is the saving available for transfer to a different German private health insurer.
To be precise, it is the monetary amount available from the “Old Age Provisions” (German: “Altersrückstellungen”) that insurers must collect up to the customer's 60th life year by adding a statutory 10% surcharge to the premium,
The purpose of "Old Age Provisions” is to compensate for increasing health insurance benefits/ costs at old age. Without these provisions private health insurance would be unaffordable for most elderly people.
In 2022 German private health insurers collectively held a total of 315.5 billion Euros in “Old Age Provisions”.
First off, the purpose of the A1-Certificate is to confirm that the law of the state of residence (sending state) applies to the posted worker who is travelling within the European borders. The type of health insurance you hold is irrelevant to obtaining an A1-Certificate, however depending on where you are insured, you must apply through one of the following channels:
|Your type of health insurance||Point of Contact|
|German Statutory ("Public")||Health Provider (e.g. TK, AOK, Barmer)|
|German Private - funded by the employer||ABV - Arbeitsgemeinschaft Berufsständischer Versorgungseinrichtungen e.V.|
|Private - Elsewhere||DRV - Deutsche Rentenversicherung (German State Pension Provider),|
via "sv.net" - link to the portal.
Please note: Registration and Social Security Number (Sozialversicherungsnummer) required!
On 1st March 2011 the European Union introduced a Directive which required all insurances to be non-discriminatory in respect of gender. This was originally intended to be aimed at property (motor) insurances but was extended to apply to all insurance sectors and came effective for health insurance on 21st December 2012.
German health insurances had always traditionally included pregnancy cover for all females – rates calculated according to age. Consequently rates for men were lower. When it was announced that unisex would be implemented to the health sector optimists believed the female rates would reduce to the male level – but of course insurance companies would not miss such an opportunity, and simply INCREASED the male rates to those of females. Naturally the men complain that they have to bear the cost of pregnancy cover and in return women however will now find that they are paying for the cost of prostate cover!
aLC never included pregnancy cover in their core benefits, which are and always have been, the same for male and female. As it always was – and still is – pregnancy cover is a separate option – not one of the core benefits. Therefore, it has not been necessary to rationalise the core benefit rates as they are inline with the EU Directive - being the same for both male and female. Also offering pregnancy as an option is also fairer – females who do not want this cover do not have to take it –EXCEPT if the German "Auslaenderamt" insist saying the insurance should be on the same lines as German insurance.
It is unlikely that any German insurer would adopt the same structure as aLC – they would after all be losing potential revenue!
The actual Law does not help too much as it relies on interpretation and the we have experienced that the Foreigners Offices also tend to apply their own ‘rules’ despite the Law.
The health insurance act enacted by the Dutch government requires any person who is classed as a resident to hold a health insurance policy that includes cover for such things as chronic and pre-existing medical conditions. Latter are not covered or have been specifically excluded on the aLC Prima plans! For this reason and by Dutch law aLC Healthcare is obliged to advise their clients that any cover provided is 'additional' and/or 'supplementary' towards existing Dutch compulsory health insurance.
ALC Health, in conjunction with their underwriter Catlin Insurance Company (UK) Ltd., has authorisation in form of a irrefragably certificate from the German Financial Supervisory Authority (BaFin), confirming that their health plans Prima Classic, Prima Premier & Prima Platinum comply with requirements, hence are fully legal. With this authorisation aLC are eligible to trade in Germany and can offer health insurance to any resident in Germany, regardless of nationality.
The above-mentioned is subject of payment in line with §193 paragraph 3 VVG (German Insurance Contract Act) and must include dental and pregnancy coverage!
All insurances are subject to inflation, yet health insurance inflation is invariably higher than normal inflation. For a more detailed explanation please read this article.
ALC Health suspend cover on the 7th day after payment is due and unless payment is received by 21st day the contract will be cancelled due to non-payment! Once cancelled, a policy can however be reinstated, yet may require satisfactory completion of a health declaration.
There are two ways to terminate a German motor insurance policy prior to renewal that cover a vehicle registered via a non-German Registration Office.
One month's notice
Prior to renewal send in one months' notice to not renew the contract in writing / text form
The following means are not accepted!
Abroad Claim Protection (ACP) enables the possibility to claim on your own insurance in the event of an incident abroad and caused by a Third Party. Making use of this optional benefit you will neither have to deal with the foreign insurer nor their domestic legislation. Instead one will receive reimbursement based on German insurance law that is considerably more sophisticated compared to most other countries. Hence, the primary purpose of ACP is financial safety should the other party's insurance decline payment or start delaying reimbursement, etc. ...
Important to understand is until one’s own insurer receives reimbursement of costs from the opposing liability insurer, using Abroad Claim Protection is initially treated as a claim against your own (liability) insurance. Therefore, it is crucial that at the time of accident the police are called out, and if not possible, then at least the European Accident Form has been completed and signed by both parties to rule out contradictory statements later on.
If you frequently travel thru different countries, it is definitely worth having and can save a lot of hassle should one ever be involved in an accident.
ERICON - as your constant companion - will of course always try to help, thus communicate with the other party's insurer on your behalf, yet unfortunately there are companies that make things more complicated than necessary and follow only one objective - avoid paying or at least delay reimbursement for as long as possible.
The insurers expect the following incidents related to motor insuance to be reported to the policy without delay.
* Relates to policies with the extra "parking benefit", covered by the Partial Risk module. Hence not the damage your moving vehicle has caused to another parked vehicle but vice versa - some other vehicle has damaged your car.
** These can also be reported to the local forstery office.
Not all but most service-motor insurers reimburse casco claims based on just a repair-cost estimate. Although presenting an assessor report is the more profitable approach, due to the additional expense commissioning an expert entails, especially for claims related to older vehicles it makes more sense to present the insurer a repair-cost estimate, knowingly that some costs won't be reimbursed until the repair-invoice is presented.
Expenses that are initially not reimbursed:
Expenses that are often not refunded:
When taking out a loan or lease on a vehicle, the 'object of desire' itself is often enough sufficient security for the creditor (bank).
Consequently, it is then the loanee's/ lessee's responsibility to make sure the value is secured, hence Fully Comprehensive cover becomes inevitable to cover the financial consequences in the event of a bigger incident or even total-loss (write-off or theft). This hedging measure also entails a requirement set by the creditor, in which the borrower cedes his right of financial reimbursement to the bank.
This is called 'Transfer of Security'.
In many countries the police like to see the International Insurance Certificate ('Green Card') after an accident for assurance that the vehicle has liability insurance and simply because it contains all necessary information.
In all countries of the European Economic Area (i.e. the EU, Croatia, Iceland, Liechtenstein and Norway), as well as in Andorra, Monaco, San Marino, Serbia and Switzerland, the International Insurance Certificate is however no longer mandatory upon entry. In these countries the so-called Licence-Plate-Agreement applies, thus authorities have assurance that liability coverage is in place by checking the registration plate.
In the following countries a Green Card is mandatory:
For all those unaware, the International Insurance Certificate, commonly known as „Green Card “, is evidence that the vehicle has liability coverage for when travelling abroad.
Since 1965 these certificates have always been green, yet as of 1st July 2020 they are also acceptable on plain white paper, allowing motorist to receive these digitally and print them themselves.
There are several rules & regulations differing from insurer to insurer but in general the certificate must be:
In Germany the No Claims Discount (NCD), called "Schadenfreiheitsrabatt", has the biggest impact on the premium you pay. The more years claim-free insurance you can show, the cheaper the insurance will cost.
To prove the amount of years the entitlement will either be electronically transferred from one German insurer to the other, or the client can send in an original certificate from a foreign insurer, which must state an expiry date and the amount of years claim-free insurance accumulated.
What clients from overseas are often not aware of is that in Germany NCD is linked to a policy number, thus not to a specific person. Consequently, if a person can prove a personal claim-free record of 30+ years, this entitlement will still only be able to be used with just one policy.
The actual NCD German insurers' grant depends on the amount of years a person has been a policy holder and the entitlement is split into Liability- & Full Casco (Own Damage) related discount. Technically this is described as: SF KH & SF VK.
On taking out car insurance with more than 3 years driving experience (EU driving licence required as proof), you will be granted SF1/2, which normally equals 70%. In money terms this means that if the annual premium without any discount (100%) was 1,000€, the following year it will reduce to 700€. And depending on whether the contract commences before or after 30th June, if after, the policy will automatically be granted SF1 - one full year NCD - as of the subsequent 1st January. The savings difference between SF1/2 and SF1 is approx. 10%.
The maximum amount of years you can achieve is endless, however the lowest percentage nowadays is generally at 25% for both Liability and Comprehensive, provided that SF35 has been reached.
Failing to make a subsequent payment with a German motor insurer does not mean coverage lapses as from the payments due-date.
Once in arrears, the insurer will send a first reminder, normally within 2-3 weeks, stating the following.
When taking out an insurance policy we give you the so-called double-white card, which you will have to present at your NATO POV/ BFG registration office (BFGLO).
In addition you will also need the following documents for NATO:
For the BFGLO you need:
To ensure your motor insurer will be accepted by Vehicle Licensing it is advisable to choose one approved by Global Support Organisation (Germany).
By addressing your application to OC BFG VLO (MAIN), BFPO 39 it is possible to check whether your non-listed insurer might still be accepted whilst posted to Germany.
With indemnity insurance the premium paid is a provisional amount based on the parameters of the previous year. Hence should the base variables responsible for premium calculation of insured risks have changed in the insurance year before, the premium must be adjustment after the end of term.
The advantage for the customer is that mid-term changes to variables that affect premium calculation (e.g. number of co-insured employees, wages and salaries or changes to turnover) will not jeopardise insurance cover, e.g. due to the risk of being under-insured.
The main difference is a mathematical measure and is due to monthly instalments.
An example based on a mortgage
If you borrowed 250.000 Euros in January and agreed to a yearly nominal interest rate of 5% then on 31st December you would have to pay
12.500€ interest. In reality though you will be paying the 12.500€ in monthly instalments of 1.042,61€, on top of the agreed redemption rate. So strictly speaking you have paid the first interest instalment 11 months to soon, the second 10 months, etc. hence have lost interest yourself and this is reflected in the higher effective interest rate.
The ancillary loan-related expense is the other piece that is reflected in the effective interest rate (e.g. administration costs). The total varies from bank to bank, which explains why two banks with the same nominal interest rate offer different effective interest rates.
Please note: Other ancillary loan-realted expenses like: commitment-interest, evaluation costs and 'normal' account administration charges are not reflected within the effective interest rate!
Yes, German law dictates that at the end of the rental-agreement the deposit has to be returned to the tenant with an interest that is in accordance to the "normal market return" for that specific period.
Banks offer several solutions, e.g. 'savings- / escrow account' or pawnable 'fixed-term deposit accounts', latter generating higher returns but also needing the landlord's approval.
With regards to 'ImmoVest", our maintenance company "park" the deposit on an 'escrow account' (e.g. Deutsche Kreditbank AG) and during the whole tenancy provide frequent balance sheets.
The Social Security Insurance for Artists & Writers (Künstlersozialkasse - KSK) is not actually a health insurer itself, but instead it acts as an employer that allows qualified artists and some other professions to apply for membership.
Upon enrolment the applicant will have access to German statutory (Public) health insurance scheme (GKV).
The person must be a self-employed artist and publicist within the meaning of the KSK Act (§2 KSVG)
The act states that the person is not only temporarily self-employed in creating music, performance arts or visual arts, or is engaged as a writer, journalist or in a similar journalistic manner, as well as teaching journalism.
KSK membership is not compulsory, does however have one very interesting aspect - financial support.
As a member of KSK this means that you are treated as an 'employee' rather than a freelancer or self-employed. As such you are then entitled to statutory (public) health insurance (Gesetzliche Krankenversicherung – GKV), which can be provided by any of the many Kassen (companies). The monthly premiums are divided into two portions, the member pays approx. 50% and KSK subsidise the difference.
If you are intending to remain in Germany long-term then membership of KSK is worth considering, despite the effects on your ‘bottom-line’ income. There are benefits to long-term membership. If however you are NOT planning to remain in Germany long-term, then you should seriously consider whether membership is worthwhile. Bearing in mind that your contributions to the various social security schemes, especially pension, are not always refundable and (pension) is only payable at retirement age. Pension does not actually acquire any value at all until you have been contributing for a qualifying period of 2 years.
One advantage of the European Union is that within the EU, this ‘qualifying’ period is valid in all EU Member States so no need to start this qualifying period again if you move within its boundaries.
.. the alternatives ...
The only alternative is not to join KSK. In this case you will have to sign up with a private insurance (Privat Krankenversicherung – PKV). This topic is quite complex, so you will need help from an intermediary/ broker such as ERICON broker or other health insurance specialists throughout Germany.
We strongly advise not to rely solely on advice from the insurance companies themselves. They will obviously only consider their own interests/ products and not the full range of options. As a non EU citizen the choice of German private insurers willing to accept an application is unfortunately very limited.
Before applying for statutory health insurance you will need to receive the certificate of enrolment from KSK. The application for this needs to be submitted direct to KSK and may take a few months (up to 6 months is not unusual) - to be processed and approved.
Download the KSK Application here.
Please note that there is also no guarantee that every application will be approved - this is up to KSK and their strict adherence to the requirements!
This waiting period (and the possibility of non-approval) invariably produces problems for people who need a residence permit for Germany as this must normally be applied for immediately on entry into Germany, and all the requirements finalised (including health insurance) within 2-3 months. Although it is sometimes possible to get an extension but this is very much up to the Ausländeramt (Residence Permit Office/ Foreigner's Office), or even the individual official you are dealing with.
On receipt of KSK's approval certificate a proposal for statutory health insurance must be made to a Krankenkasse (statutory health insurer). This can be done directly with the company, however we recommend to consult a representative or broker, like ERICON broker, to deal with this matter, after all it is a complex issue. The decision of which GKV provider the applicant wishes to join up with is totally up the individual.
The last stage before completing the whole procedure is to inform KSK of the provider you have chosen.
KSK are asking for your Social Security Number, which is made up of numbers and letters and is used to clearly identify a person within the social insurance structure. It consists of 12 digits in the following order:
Although the Social Security Number is kind of similar to the Pension Insurance Number and latter can even be found on the Social Security Card, it is not the same because they have different identifiers.
Should you be missing your Social Security Number you can apply for it at the Pension Insurance Institute (Tel 0800 / 1000 4800) or simply let KSK do the job when accepted.
In order to support those affected by COVID 19, the legislator has extended §3 KSVG. This is the paragraph that determines a minimum income of 3,900€ per year.
The following sentence has been added: "Falling below the limit in 2020 and 2021 will not be taken into account.
This means that KSK will not kick anyone out just because they fell below the income requirement during these two years.
And even without this new regulation, it was always the case and still is: KSK members are allowed to earn less than 3,900€ per year twice within six years. With this new regulation it is now up to four times.
The cost of statutory health insurance (German: GKV) is related to income and shared equally between member and KSK.
The exact total cost is dependent on the member's choice of statutory provider, though the current average is 15.9% (14.6% Fixed + 1.3% Additional Fee).
Important to understand is that to assure that contributions are based on factual income, the person must provide KSK an assessment of their anticipated annual income and this initially and at the end of every year. And should they ever be audited, will need to affirm their declarations by providing official documentation in form of a 'Profit & Loss Report', Tax Return or any other acceptable evidence, such as: contracts, business proposals, orders, bank statements, etc.
Whether or not a person is unsured whilst their application is being processed is not a matter that KSK is concerned about, as all they must see on acceptance is a Certificate of Insurance by either a German statutory ("public") or private insurer.
HOWEVER, as since 1st January 2009 there is health insurance obligation for every person with their residence in Germany, all future health insurers have a legal commitment to check whether or not the applicant is in possession of a recognised insurance policy and if not, are enforced to charge back payments.
KSK are legally obliged to issue an Annual Statement that lists the amount of contributions that have been paid towards the German Pension Scheme and German Health Fonds, latter for medical and long-term care insurances. This document is usually sent within the 1st quarter of every year.