Many Households in Germany Are Unprepared
If a household loses an income due to a death, most are not covered by term life insurance. Yet this type of insurance ensures financial security for surviving dependents. The agreed insurance sum can be used to repay loans and mortgages or to maintain the financial independence of loved ones. Here’s why term life insurance is so important for you and your family.
The Potential of Term Life Insurance Is Hardly Used
In Germany, there are around 41.3 million households, many of which have taken out various insurance policies. For example, over 83 percent have liability insurance, but only 17 percent have term life insurance (according to the Federal Statistical Office). Admittedly, thinking about one’s own death is difficult. Nevertheless, it’s essential to plan ahead and provide for your dependents.
How Term Life Insurance Protects Your Loved Ones
Term life insurance ensures that surviving dependents are not left in financial distress if the insured person passes away. Other financially dependent family members are also covered in the event a main earner dies. This type of insurance can also be used as collateral for loans, such as a mortgage. If the insured person dies, the agreed insurance sum is paid out to the beneficiaries.
When Term Life Insurance Makes Sense
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Families:
A term life insurance policy is essential when the death of a parent or partner would create a financial gap that cannot be closed otherwise. The insurance sum provides for the care of loved ones. The policy term can be aligned so that it ends when other pension claims begin or when children complete their education or studies. -
Couples & Partners:
It’s also recommended for couples without children. It helps maintain the standard of living even after the loss of a partner. -
Mortgages & Loans:
To secure a mortgage, a term life insurance policy with a decreasing insurance sum is recommended—running parallel to the loan repayment. This ensures that in case of death, the remaining debt is always covered appropriately.
