Insurance for unforeseen personal incidents: Worthwhile or unnecessary?
In the ever-changing world we live in, it's essential to have a safety net to protect us from unforeseen circumstances. This is where private accident insurance comes into play, offering comprehensive coverage that statutory insurance in Germany may not provide.
Statutory accident insurance in Germany covers accidents only at work, school, or recognised activities, leaving a significant gap when it comes to private-time incidents such as accidents at home, during vacations, or unsupervised play. Over 75% of accidents occur in private time, making private accident insurance a valuable asset for those seeking 24/7 protection at home and abroad.
Private accident insurance offers a range of benefits, including lump-sum payouts for permanent disability, financial help for medical treatment, rehabilitation, home modifications, coverage of rare events (e.g., poisoning, allergic reactions), and even coverage for unusual accidents such as those caused by heart attacks or seizures. Some plans also cover activities like altitude sickness or diving accidents.
The cost and funding of private accident insurance can be manageable for employees, with some policies offered as voluntary benefits shared between employer and employee, or available as more affordable group policies. Individual premiums vary based on coverage and risk profile.
It's important to note that employer-paid premiums may be taxable income for employees, but group policies under certain limits (€100/year) may offer flat-rate taxation at 20% or partial tax-free allowances depending on circumstances.
Additional features of private accident insurances can include assistance services such as therapy consultations, household help, or coverage abroad, which can be crucial depending on your lifestyle or travel habits.
When considering private accident insurance, it's essential to assess your personal accident risk, taking into account your daily activities, hobbies, family situation (e.g., children), possibility of travelling, and how much financial security you want for yourself and loved ones in case of accidents not covered by statutory insurance.
In summary, private accident insurance in Germany is most relevant if you want comprehensive, round-the-clock coverage that statutory insurance does not provide, particularly if you are active, travel frequently, or have dependents like children. Assess the coverage details, costs, tax effects, and your personal accident risk to determine if such insurance suits your needs.
When it comes to cancelling your policy, it's best to do so in writing, usually with a notice period of 3 months to the end of the insurance year. However, following the settlement of a claim, the insurance company may exceptionally cancel your policy as a customer.
It's also worth noting that some insurances may not pay out at all or only a reduced amount in case of an accident related to a pre-existing condition. Each insurance company can set its own 'Gliedertaxe', providing a one-time payment in case of a disability.
Lastly, it's important to remember that a good accident insurance policy should pay at least 500,000 € in case of total disability and at least 100,000 € for a 50% disability. For an additional premium, many accident insurance policies offer an accident pension, but it usually only kicks in if the disability rate is at least 50%.
In conclusion, private accident insurance in Germany offers a valuable safety net, filling the gaps in statutory coverage and providing comprehensive protection for a wide range of incidents. Consider your personal circumstances, risk factors, and lifestyle to determine if private accident insurance is right for you.
[1] Deutsche Angestellten-Gewerkschaft (dsgv) [2] Deutsche Rentenversicherung Bund [3] Allianz SE
Other financial considerations to bear in mind when evaluating private accident insurance are tax effects and potential employer contributions. Employer-paid premiums may be considered taxable income for employees, but group policies under certain limits (€100/year) may benefit from flat-rate taxation at 20% or partial tax-free allowances depending on circumstances.
Private accident insurance can also be a valuable asset for employees with additional features such as assistance services, coverage abroad, or an accident pension, which can be crucial depending on your lifestyle or travel habits. Some companies may even offer voluntary benefits shared between employer and employee or more affordable group policies.
