Life insurance are still Germany’s top insurance products and that will most likely stay so for the next years. They represent a two-way safety net: money for your family in the case of your death and money for you when you retire. However, in the age of low interest rates, many products are questionable at best and a decision should be well thought through.
Risk life insurances (Risk-LI) have one main objective: the financial security of the surviving dependents in the event of death.
The functionality is therefore also sufficiently simple and can be explained quickly: If you die within the contract period, your family members will receive a one-time payment.
Of course, despite the relative simplicity, there are some aspects that need to be considered, and that influence contribution and pay-out.
In particular, the correct insurance or coverage sum must be chosen. This is the amount that will ultimately be paid on death.
Of course, the benefits must be clear and almost more important: the exclusions. You must be aware of when the insurance will pay and when not.
If the insured person dies, the insurance sum is paid out to the surviving dependents.
The coverage sum can change during the contract period and can be made more suitable for your individual insurance need:
If spouses or business partners are also to be insured, so called joint Risk-LIs or partner Risk-LIs can be taken out. They will pay out if one (or both) insured person dies.
Due to the legal situation (keyword: inheritance tax), unmarried couples should in most cases take out two separate insurance policies.
The Risk-LI has two distinct scenarios in which it is an excellent tool:
If you are financing something with a loan (e.g. a house or apartment), we strongly recommend a Risk-LI. Loans are usually tailored to steady incomes and the Risk-LI secures the financial risk.
Furthermore, the Risk-LI offers a great way of making sure that your loved ones have enough funds in case of your death.
The Risk-LI is particularly attractive for young families, as it offers high coverage sums for relatively small premiums and is therefore affordable for people who are still at the beginning of their careers.
Premium for a 35y with a coverage sum of 100.000 €