What does life insurance mean in Germany?

Risikolebensversicherung is term life insurance: it provides an agreed death benefit if the insured person dies within the covered term and the conditions for payment are met. Pure term cover does not build a savings pot. If the insured person survives the term, there is normally no maturity payment.

Kapitallebensversicherung combines death protection with a capital-building element and a benefit at the agreed contract end. BaFin describes these as different product categories. Do not compare their premiums as if they bought the same thing.

Our income-protection guide concerns a separate risk. A death-benefit contract should not be read as covering inability to work unless an explicit additional benefit says so.

Start with the household’s actual gap

A useful preparation exercise is to list the obligations another person would have to meet without your income or unpaid care. Include the time period for each item. A mortgage balance, several years of childcare and a short transition budget are different needs; a single salary multiple can hide that difference.

Then list resources that are already available for that purpose and the assumptions behind them. Do not count an asset twice or treat an uncertain future income as guaranteed. This worksheet helps frame questions; it is not a personal recommendation for a sum insured.

For example, ask whether the intended benefit is meant to address outstanding debt, ongoing family spending or both. If a declining-benefit policy is proposed, compare its schedule with the obligations you are trying to address at several future dates.

Policyholder, insured person and beneficiary

The policyholder owns the contract; the insured person is the life on which the death benefit depends; the beneficiary is the person designated to receive the benefit under the arrangement. They are not necessarily the same person. VerbraucherService Bayern explains this distinction when describing term cover.

Write the names and roles on one page before applying. Ask the insurer to confirm how the beneficiary is designated, how a change is made and whether the designation is revocable or irrevocable. Section 159 VVG distinguishes those beneficiary arrangements. Review the wording after a marriage, separation, birth or move.

For international or unmarried households, get qualified advice about the ownership and tax consequences before choosing the structure. Do not assume that a beneficiary label resolves inheritance, tax residence or cross-border law.

Treat the application as part of the contract

Section 19 VVG concerns disclosure of known material risk circumstances asked about by the insurer in text form. Answer the actual questions accurately, using their stated periods and definitions. If a question is unclear, ask for clarification before submitting rather than guessing what the insurer intended.

Keep the application, any clarification, the acceptance and the issued conditions together. An indicative price before underwriting should not be treated as an unconditional final offer. For a move abroad, ask specifically about eligibility, ongoing residence requirements, notification duties and the claims process.

How to compare term life offers

1. Benefit: record the amount at the start and at later dates.
2. Term: record the start, end and any extension conditions.
3. People: confirm whose life is insured and who would receive payment.
4. Premium: ask which amounts can change and under what conditions.
5. Conditions: read exclusions and any restrictions or special acceptance terms.
6. Administration: confirm the language of binding documents, service and claims evidence.

Reuse the same benefit and term across quotes. Put any different answer in a separate column rather than comparing only the monthly debit. This page does not test claims handling, rank insurers or provide a market price.

If the offer also builds capital

Ask for a clear separation of guaranteed amounts and projections, the costs, the effect of stopping contributions and the amounts available on early exit. BaFin identifies costs as an important risk for capital-building life products and uses effective costs to assess their effect. That does not establish the value of an individual contract.

Compare the complete arrangement with the purpose you actually have. The private pension and investment-account guide gives a framework for access, costs and portability; the features of a specific life policy still require its own review. Do not cancel existing protection merely because an alternative quote looks attractive before the replacement is accepted and its start confirmed.

Common questions

Sources and scope

Checked on 26 October 2026. General information; individual eligibility and contract outcomes require the relevant authority, payroll team or insurer to assess the facts. No provider ranking or personal advisory service is offered.

BaFin blocked direct full-text retrieval during this review. Its indexed official summaries support the product distinction and cost context; the accessible consumer explanation and statute support the other cited details.

• BaFin: term life category; indexed official summary
• BaFin: capital-building life category; indexed official summary
• BaFin: effective-cost risk; indexed official summary
• VerbraucherService Bayern: term insurance, roles and term
• Insurance Contract Act: §19 disclosure and §159 beneficiaries