Save money on pensions and pensions: These insurances are unnecessary

Cleaning out is worth it

You don’t need these ten insurance policies

It’s good to get rid of unnecessary things. Why not take a closer look at insurance coverage? There may be potential lurking here.

Most people probably want to be well insured. However, experts believe that many policies on the market are unnecessary. Our overview shows you which ten common insurance policies cost you a lot of money, but are ultimately not worth it.

All capital-forming insurance policies are neither suitable for retirement provision nor for wealth creation. This is not only due to the still low guaranteed interest rates – even after a recent slight increase – which mean that little return can be expected. But also because of the non-transparent and overpriced cost structures (more on that here).

Ultimately, they mean that “the guaranteed benefits insured are lower than what was paid in premiums,” says Julia Alice Böhne from the consumer protection organization Bund der Insured in Hamburg. Read here how much your life insurance is worth.

“Here you shouldn’t just look at the amount of funding or tax advantages, but you should also look at the general conditions,” says Roland Stecher from the Bremen consumer advice center. The legal rules are complex.

In addition, low guaranteed interest rates combined with often high costs have led to low returns. While savers from the “first Riester generation” benefited from better contract conditions, “the funding rate now has to be very high for Riester to be worthwhile,” says Stecher. Read here what the advantages and disadvantages of a Riester pension are.

According to Stecher, a Rürup pension is “a very expensive and extremely inflexible” retirement product. As a rule, it is not suitable as an alternative to statutory pension insurance for the self-employed. Rürup contracts do not adapt to changing income or life situations. You can read exactly how the Rürup pension works here.

In general, there is no provision for surviving dependents – so unlike the statutory pension insurance, there is no widow’s or widower’s pension.

You can cover your own funeral costs with funeral insurance. “The amount of the insurance premium also depends on the probability of death,” explains Stecher. The older, the higher the mortality risk – and therefore the higher the contribution.

Especially for older people, more contributions were quickly paid out than the surviving dependents would receive in the event of death. A tip from Böhne: “If you want to relieve relatives of your own death, you should do so by investing money in a timely manner.”

Training insurance is a form of capital life insurance – with all its disadvantages. “Cancellation is only possible with high losses,” says Stecher. High acquisition fees reduce the return or the payout amount. Better than training insurance: “Invest the money yourself – for example in an ETF savings plan,” says Böhne. You can read how this works here.