How many types of insurance are there

Important insurance

Which insurance you need and which you don't

Julia Rieder
Expert for insurance as of May 19, 2021

Julia Rieder

Julia Rieder is an editor for insurance companies and, as the deputy head of text, takes care of the linguistic quality of all texts. During her traineeship at Finanztip, she sat in on RBB Inforadio. Before that, she gained journalistic experience in the editorial offices of Frontal 21, the Berliner Zeitung and the online magazine politik-digital. Julia graduated with a master's degree in political science in Berlin.

  • Everyone should have health insurance and personal liability insurance.
  • If you own a property, residential building insurance is also essential. Occupational disability and travel health insurance are very useful.
  • Life insurance is no longer worthwhile.
  • Cell phone, glasses, luggage and animal health insurance are also superfluous.
  • Check your insurance policies regularly as soon as something changes in your life - for example when you move in with someone, get married or retire.
  • Before taking out insurance, always consider whether you could pay the costs out of pocket in the event of an insured event. Then you don't need insurance.
  • Use our overview of the recommended insurance policies for singles, families and retirees to decide whether you are adequately covered.

Life is a risk - insurance companies sell according to this motto supposed protection for all situations. From wedding cancellation insurance to cancer insurance to contracts for washing machines and dryers: There is little that cannot be insured somehow. In many cases, however, this does not make sense.

Two insurance companies should really everyone to have a Suffer- and a Liability insurance. In addition, there are some other insurances that can be useful, depending on the life situation. Others are dispensable.

These insurances are compulsory

With some insurances you have no choice, they are required by law. These include health insurance, motor vehicle liability and, for many, statutory pension insurance

Health insurance

Every German citizen must have either statutory or private health insurance. This is required by the state. For most people, statutory health insurance makes more sense. With private health insurance, contributions often rise sharply with age. That is why you should only take out private insurance if you are absolutely certain that you will be able to pay for it in the long term. Those who do not have health insurance will only be treated in an emergency.

More on this in the guide to statutory health insurance

  • There are clear differences between health insurance companies when it comes to service, additional benefits and contributions.
  • Providers recommended by us: IKK Classic, HEK, SBK, BKK24 and BKK VBU.

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For drivers: motor vehicle liability insurance

Every vehicle must have at least liability insurance. Full and partially comprehensive insurance, on the other hand, are optional. You should be particularly careful when buying a used car: if you do not take care of car insurance in good time, you will have to pay a fine.

More about car insurance in our guide

  • Every fall, compare whether your car insurance is still the cheapest.
  • Recommended way to the cheapest tariff: First compare at Verivox or Check24, then get an offer at Huk24.

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For employees: Statutory pension insurance

For most people, statutory pension insurance is the most important component of their retirement provision. For employees, the contribution to the pension insurance is automatically deducted from the wages each month. Some self-employed such as craftsmen and midwives are also compulsorily insured in the statutory pension insurance, all other self-employed can pay contributions voluntarily. Often, however, the statutory pension is not enough and additional private pension provision makes sense.

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These insurances are really important

In addition to the compulsory insurance, there are some contracts that you should absolutely have because they protect against major financial risks. The good thing: important insurance policies don't always have to be expensive. A sensible personal liability insurance is already available for 5 euros a month, a travel health insurance for less than 10 euros a year.

Personal liability insurance

Private liability is one of the most important insurances. It can protect you from costs that threaten your existence, for example if a person is harmed through your fault. Personal liability insurance is therefore a must for everyone. However, not everyone needs their own contract: Many are insured through the family tariff of their parents or partner.

For property owners: homeowners insurance

If you own a property, you should take out residential building insurance for your house or apartment. This insures damage caused by storm, hail, fire or lightning strike. If necessary, you can expand the contract with natural hazard insurance.

As soon as you leave Germany: Health insurance abroad

A travel health insurance abroad is very useful, even when traveling within the European Union. She pays for treatments and medically necessary repatriation transports. Statutory health insurance only partially or not at all covers such costs abroad - depending on the country of travel. As a privately insured person, you should also check whether you need health insurance abroad. If you go abroad for more than eight weeks, you need a special contract.

More on this in the guide to health insurance abroad

  • If you travel abroad, you can get the necessary health insurance coverage for less than 10 euros a year.
  • We recommend tariffs: DKV (Reise Med tariff RD) (can be locked on the Ergo website) for individual travelers and families, Debeka (tariff AR) for seniors and trips up to 70 days.

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For employed people: disability insurance and alternatives

Almost everyone needs disability insurance - regardless of whether they are roofers or clerks. Because not only broken bones can make you unable to work, but also mental illness. The low statutory disability pension is often not enough. Especially if you are young or self-employed, you should therefore cover yourself - the earlier you start, the better. If you cannot get a contract for health reasons or if the protection is too expensive for you, there are alternatives to occupational disability insurance.

More on this in the advice on occupational disability insurance

  • The state disability pension is not sufficient; occupational disability insurance makes sense for almost everyone.
  • Brokers recommended by us: Hoesch & Partner, Buforum24, Zeroprov, Dr. Schlemann independent financial advice, P&F.

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For dog owners: dog liability insurance

In some federal states it is already required by law: dog liability. A contract makes sense for all dog owners. The insurance covers damage caused by your dog. The four-legged friend is not insured in the private liability insurance.

For single earners and for home loans: term life insurance

If one parent dies, the other alone has to secure the family's income. Being a single parent is one of the greatest risks of poverty in Germany. Term life insurance protects your survivors against poverty. If you haven't paid off a home loan yet, insurance is a must. Even if your family lives mainly on a salary, a contract makes sense.

More on this in the advice on term life insurance

  • Families with a single earner or a real estate loan need protection in the event of death.
  • We recommend Hannoversche, Huk24, Europa and Cosmosdirekt. You should always compare the latter with a second provider in order to avoid price outliers.

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For self-employed and high earners: daily sickness allowance

The daily sickness allowance compensates for the loss of income due to illness. If you do not receive sick pay from the statutory health insurance, you need a daily sick pay. This applies to privately insured and self-employed. Insurance can also be useful if your earnings are above the assessment ceiling. Then the sick pay is significantly lower than your net salary, and you should check whether the sick pay is enough to cover your running costs.

Video: The main insurances

You can think about these insurances

Some contracts belong more to the category of "optional insurance". This means that they are not absolutely necessary, but in some cases they can be a good addition to your insurance cover. However, you should only concern yourself with such offers if you already have all the really important insurance and there is still enough money in the household budget for additional protection.

Supplementary care insurance

Maintenance is expensive. The benefits from the statutory long-term care insurance are usually not sufficient to cover the high costs of care and medical care. A private supplementary long-term care insurance can close this gap, but it often costs a lot. Such a contract only makes sense if you can afford the high contributions over the long term.

For parents: child disability insurance

If a child suffers permanent damage to health through illness or a serious accident, child disability insurance can provide financial security for the future. Good policies pay a monthly pension for life. After completing their training, the child needs occupational disability insurance instead of child disability.

Household insurance

If water damage destroys the apartment, household contents insurance will replace clothes, furniture and valuables. It is particularly suitable if you have an expensive facility, or in the event that you cannot replace the most important inventory from your savings.

More on this in the household contents insurance guide

  • You should have this insurance if you cannot replace your facility at your own expense after a fire or burglary.
  • Portal recommended by us: Mr-Money

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For car owners: fully comprehensive / partially comprehensive insurance

Motor vehicle liability insurance covers damage that you cause to others in traffic. You can insure damage to your own car with fully comprehensive and partially comprehensive insurance. You should take out fully comprehensive insurance for new cars; partial comprehensive insurance is sufficient for high-quality older cars. You do not need either of the two types of insurance with old rust structures.

For the self-employed: basic pension coverage

If you are self-employed, everything revolves around business in the first few years. But at the latest when your company is running smoothly, you should think about your retirement provision. You can either take out compulsory statutory pension insurance or save up in a classic Rürup pension insurance. A combination of voluntary statutory pension insurance and unit-linked Rürup pension insurance is also an option.

For employees: company pension scheme (direct insurance)

If you are employed and assume that you will remain loyal to your employer for the next few years, you should address the topic of company pension schemes. Your boss is obliged to find you a private pension insurance. In the context of company pension schemes, one also speaks of direct insurance. The advantage: You don't pay any social security contributions or taxes on your direct insurance contributions. It's worth it if your boss takes over parts of your contribution. A 15 percent subsidy is mandatory for employers from 2019 - but try to negotiate more.

More on this in the company pension plan

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For families and (employed) high earners: Riester

If you are employed and want to top up your statutory pension through private provision, a Riester contract is an option. The state supports your savings plans with allowances and tax advantages. Families with several children or individual high-income earners particularly benefit from the support. You can think about a classic Riester pension insurance. However, the Riester fund savings plan offers more prospects for returns. If you earn on average, you should rely on this Riester variant.

More on this in the Riester fund savings plan guide

  • Of all the Riester variants, a fund savings plan offers the best chance of a high stock return.
  • Our provider recommendation: DWS Toprente Dynamic (via online broker), Deka Zukunftsplan Classic, Uniprofirente Select (fund: Uniglobal II)

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Dental insurance

Statutory health insurance only pays fixed amounts for the cost of dentures. Often there is therefore an own contribution of a few hundred or even thousands of euros. Nevertheless, additional dental insurance only pays off if you often need expensive dentures. Good contracts tend to be expensive, and the insurance company does not pay for treatments that the dentist advised before the contract was signed.

More on this in the guide to supplementary dental insurance

  • Good supplementary dental insurance is quite expensive and is only worthwhile with frequent, costly treatments.
  • We recommend tariffs: ZZ Pro90 from Huk-Coburg / Huk24, Generali Plan Z1, Ottonova Zahn 85 and Hallesche Megadent

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Legal protection insurance

If you want to protect yourself against the costs of a legal dispute, you can take out legal protection insurance. However, this only pays for disputes in areas of life specified in the contract. Members of tenants' associations are already insured cheaply against rent disputes, union members against labor law proceedings. And liability insurance helps if someone makes an unjustified claim for damages against you.

More on this in the legal protection insurance guide

  • You can get good legal protection for less than 300 euros a year.
  • Tariffs recommended by us: Arag Aktiv Komfort, Auxilia Jurprivat, WGV Optimal

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Supplementary hospital insurance

Those who value treatment by specialists can take out additional hospital insurance. She pays additional fees for specialists and additional costs for other private services in the hospital, such as accommodation in a single or double room.

More on this in the guide to additional hospital insurance

  • With this insurance you get paid for expensive treatments by specialists and you have a free choice of hospital.
  • Tariffs recommended by us: Deutsche Familienversicherung Klinikschutz Premium, R + V Klinik premium (K1U), Allianz Krankenhaus Best (KHB02 and AOPKH02), Inter Qualimed Z Stationary S1

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Accident insurance

Accident insurance pays if there is permanent physical impairment after an accident. If your injuries heal without consequences, you will not get any money. Important to know: Only 2 percent of severe disabilities are caused by an accident, illness is much more common. Private accident insurance therefore only offers limited protection. It can be considered as an emergency solution if occupational disability or disability insurance is not possible. Because they pay when you can no longer work - regardless of whether it is caused by an accident or illness.

For seniors and families: travel cancellation insurance

Travel cancellation insurance can be useful if you have booked a very expensive trip well in advance and are often ill. The insurance also steps in if fellow travelers or relatives fall ill or die. However, the cancellation costs are often lower than expected.

You don't need this insurance

A thick folder with many insurance contracts may give you a feeling of comfort. But every insurance costs money and it does not always protect the way you want it to. Therefore our advice: Do not take out insurance on the side, but consider carefully whether you really need it for every contract.

It is helpful to think about the costs that you would incur in the event of an insurance claim. If you could pay the costs from your savings, you don't need insurance.

An example: If your beloved cell phone breaks, it's annoying. However, buying a new smartphone does not bring you into existential hardship. Mobile phone insurance is therefore superfluous. It looks different when your house burns down. In such a case, without residential building insurance, you are faced with financial ruin.

You can do without the following insurance.

Capital or unit-linked life insurance

Because of the low interest rates and high costs, it is no longer worth taking out capital-linked or unit-linked life insurance. The new index policies are also not very suitable. For old-age provision, there are alternatives beyond insurance: for example, ETF savings plans in combination with a payment plan in the retirement phase.

Pension insurance

Even taking out a new classic or unit-linked pension insurance is currently not profitable due to the high costs and low interest rates. Only a commission-free net policy that saves with cheap stock index funds (ETFs) can be worthwhile. You can get the best flexible retirement provision with an ETF savings plan and a combined payout plan.

Education insurance

Education insurance is actually a life insurance policy for children, most of which parents or grandparents take out. It is expensive and inflexible - it usually makes more sense to invest the money yourself.

Additional outpatient insurance

Additional outpatient insurance only makes sense if you often want to use alternative healing methods. However, the annual reimbursement is usually limited and many health insurance companies now offer extensive additional services for homeopathy, alternative medicines and osteopathy.

Payment protection insurance / credit default insurance

A residual debt insurance is not worthwhile, especially with smaller installment loans. It is too expensive and in many cases does not even step in if you can no longer pay the installments.

Death benefit insurance

In the event of the death of the insured person, relatives receive money from the death benefit insurance for the funeral. It makes more sense to save the money for a funeral yourself.

Cell phone insurance

Cell phone insurance is often expensive and eliminates a lot of damage. So pay for the repairs yourself.

Animal health insurance

Health insurance for your pet is unnecessarily expensive and does not or only partially cover many of the costs. Also, most dog and cat treatments aren't expensive enough to ruin you financially. It makes more sense than animal health insurance to save some money every month for later visits to the vet.

Glass breakage insurance

A lot of glass damage is already covered by personal liability, residential building or household contents insurance.

Glasses insurance

Glasses insurance is usually sold as a package with other insurance companies, none of which are particularly efficient. But you can also do without a single glasses insurance. The reimbursement amounts are always capped, often between 100 and 400 euros every one to three years. It is better to save money on new glasses than to pay contributions.

Hospital daily allowance insurance

Daily hospital benefit insurance pays an amount for every day you spend in hospital. Daily sickness allowance insurance makes more sense because it also pays out when you are sick at home.

Luggage insurance

Household contents insurance usually covers the loss of luggage while on vacation. Luggage insurance is therefore unnecessary.

Child accident insurance

Child accident insurance is intended to protect children financially if they are dependent on help for the rest of their lives due to the consequences of an accident. Since it only pays in the event of a serious accident, the insurance does not adequately cover children. Child disability insurance is better.

Julia Rieder

Julia Rieder

Julia Rieder is an editor for insurance companies and, as the deputy head of text, takes care of the linguistic quality of all texts. During her traineeship at Finanztip, she sat in on RBB Inforadio. Before that, she gained journalistic experience in the editorial offices of Frontal 21, the Berliner Zeitung and the online magazine politik-digital. Julia graduated with a master's degree in political science in Berlin.

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