Premium Exemption
With premium exemption, an insurance contract continues without further premium payments, but benefits are reduced accordingly.
Key Takeaways
- •With premium exemption, an insurance contract continues without further premium payments, but benefits are reduced accordingly.
- •Premium Exemption belongs to the Insurance category. We explain it step by step for newcomers to Germany.
- •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.
meinetarife24 Editorial Team
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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)
Related Terms
Sources & Methodology
Our methodology: the meinetarife24 Editorial Team checks every definition against binding primary data sources and consumer-focused reference portals. We name the relevant legal basis, link related terms and update each entry regularly. We do not sell loans or tariffs ourselves. This explanation is provided purely for information.
- • Legal basis: §165 VVG (Conversion to paid-up insurance)
- • Price Indication Regulation (PAngV) at Gesetze im Internet
- • Finanztip and the Deutsche Bundesbank as independent references on interest rates and consumer credit.