Premium Exemption
With premium exemption, an insurance contract continues without further premium payments, but benefits are reduced accordingly.
meinetarife24 Editorial Team
Our independent editorial team carefully reviews all information and regularly updates the content.
Detailed Explanation
Premium exemption is an alternative to cancellation for life or pension insurance. The contract remains in place, but benefits are reduced to the value accumulated so far.
Use cases: - Financial difficulties - Job loss - Change in priorities - Alternative to cancellation with loss
Effects: - No further premium payments needed - Insurance coverage remains (reduced) - Often better than cancellation (less loss) - Reactivation sometimes possible
For life insurance: - Death benefit is reduced - Capital accumulation stops - Administration costs continue
For disability insurance: - Disability pension is reduced proportionally - Resumption often with health check
Practical Example
Mr. Schmidt can no longer pay his life insurance (1,000 EUR/year). Instead of canceling (with high losses), he opts for premium exemption. The payout drops from 100,000 EUR to 45,000 EUR.
Legal Basis
§165 VVG (Conversion to paid-up insurance)