I’m a little bit confused about the different insurances in Germany. Are there insurances I need to have? Which ones are the most important? And what would you recommend?
Thanks a lot.
The types of insurance are,
Social insurance scheme - This is mandatory. Half of this is paid by the employer, and the other half by the employee and is automatically deducted from their salary. There are two exceptions; where employees may pay slightly more than their employers for their health insurance, and the other is the employer paying the whole contribution for accident insurance. These contributions increase your entitlement to the different benefits from the social insurance scheme The contributions you make will depend on your income.
There is a threshold for contributions to the pension fund and health insurance. If your income exceeds this, your contributions will not increase anymore.
Pension insurance scheme - This is generally compulsory for employees This insurance ensures your financial security in your old age. Before 2012, the pension age was 65. After 2012, 67 and from 2029, this will apply to all who were born in or after 1964. There will be exceptions, such as people who paid into their pension fund for a very long time. This insurance can be a means of support, even before the pension age, in cases of incapacity. This includes having a serious illness or disability which either stops you from working, or reduces your hours to part-time only. There is also support for widows and orphans.
The pension fund is lower than your working income. To maintain your living standards during pension age, it may be better to supplement your pension insurance with a private scheme.
Health insurance - This insurance helps you and your family when you are ill. It pays for health care, rehab and costs of childbirth. If you cannot work for a long period due to illness and thus receive no salary from your employer, the health insurance pays you sick pay (Krankengeld) as compensation.
The health insurance cover is compulsory for employees with an income up to a limit. Employees who earn over the limit can choose whether to opt for the normal health insurance (gesetzliche Krankenversicherung) or private insurance (private Krankenversicherung).
Long-term care insurance (Pflegeversicherung)- This helps you when you are in need of nursing care, whether you are in old age or because of a severe illness. This insurance also provides financial support and advice for carers of relatives. Submitting an application is important, in order to claim benefits from this scheme. This is automatic, along with the health insurance. Unless your health insurance is private, then you will need to take out a private care insurance too.
Accident insurance - This insurance supports you and your family with any health and financial problems that immediately happen after an accident at work or an occupational illness. Accidents at work also include accidents that happen on the way to and back from work or school.
Unemployment insurance - If you become unemployed through no fault of your own, then you will receive more than just financial support from the state. This includes access to the job placement services from the Federal Employment Agency (FEA), training and unemployment benefits.
If you lose your job, you can claim employment benefit (Arbeitslosengeld), if you were in a job that paid the social insurance for atleast 12 months. The FEA will check if you meet the conditions beforehand. You cannot receive this benefit for longer than 12 months. You must report to the FEA 3 months before your job ends to notify them that you are looking for work, in order to avoid disqualification from receiving benefits for a short period.. If you find out at short notice that you are losing your job, then you must report it no later than the third day after you are told by your employer.
At the age of 50, you will receive it for 15 months. At 55, 18 months and 58+, for 24 months. If you are unemployed longer than the allowed period of time, you can receive unemployment benefit II (Arbeitslosengeld II). This is available for those who can work but haven’t found work for a long time, aswell as those who don’t earn enough money to support themselves and their family.
Property and personal insurance - There are many types of private insurance such as:
- Personal liability insurance
- Home contents insurance
- Occupational disability insurance
- Life assurance
- Motor vehicle liability insurance
These types of insurance cost money, so be careful before agreeing to any contract. Motor liability vehicle insurance (KFZ-Haftpflichversicherung) is compulsory if you have a car or motorbike. Personal liability insurance (Privathaftpflichtversicherung) will pay out damages if you unintentionally injure another person.
All of these insurances are recommended and are important according to your own individual needs.
Hope this helps you!