Residual debt insurance: Sales collapse by almost 60 percent after reform

Reform is having an impact

Controversial insurance: sales collapse

The sale of residual debt insurance fell by almost 60 percent in 2025. A new rule is responsible for this.

“The massive slump in new residual debt insurance since 2025 clearly shows that the traffic light government at the time successfully put the brakes on unnecessary residual debt insurance,” noted Schmidt.

Banks usually offer residual debt insurance when taking out loans. They allow customers to secure their installment payments in the event that they become unemployed, unable to work or die. However, consumer advocates criticize the policies: They are usually very expensive and often do not work.

For a long time, insurance was a very lucrative business for banks. An investigation by the financial regulator Bafin in 2017 showed that banks received commissions of up to 70 percent for selling insurance. For example, if a customer paid 1,000 euros for the insurance, 700 euros of this went to the bank as an agency fee. The Bundestag then decided to cap the commissions: since 2022, they can only amount to a maximum of 2.5 percent of the loan amount.

Schmidt sees this assumption confirmed by the collapse in sales figures: “Before the waiting period was introduced, a lot of people took out residual debt insurance because they were pressured to do so when taking out the loan, and not because they really needed the insurance.” The waiting period therefore protects people from hasty decisions and forced insurance policies.

At the same time, we want to keep an eye on further developments. In September, the consumer advice center reported that bank customers felt pressured to take out existential protection insurance. This is designed similarly to residual debt insurance, but differs from it in some details.

The seven-day waiting period does not apply to taking out these insurance policies. The consumer advice center therefore points out that customers who do not want this insurance cover should not allow themselves to be pressured into taking out the insurance. The conclusion of such insurance is not a prerequisite for the bank to grant a loan.