Private health insurance premiums in old age: How much are they?

There is still the prejudice that the contributions to private health insurance are unaffordable in old age. But that is not true at all. In this article, we take a look at how health insurance contributions can look in retirement.

Medizinisch geprüft - Siegel
Reviewed by our insurance experts

What changes when you retire?

Private health insurance

Retirement age contribution:

Old-age provision:

Public health insurance

Retirement age contribution:

Old-age provision:

What are the advantages of private compared to public health insurance?

By the way, you can join private health insurance despite illness - your contribution will then be individualized according to the risk (risk surcharge). Depending on the diagnosis, private health insurance also has the right to refuse membership.

What changes in the pension if you have public health insurance?

There are currently two scenarios: Either you pay a reduced contribution rate as a compulsorily insured pensioner or the full contribution rate as a voluntarily insured pensioner.

Compulsorily insured:

Voluntary insured:

Getting older does not come as a surprise. You can take specific precautions now. Think about it early on, because:

This is what your contribution to public health insurance could look like in retirement*:

Your state pension per month: 2.400 €

Your GKV premium (8.1%): 194,40 € + Nursing-care: 73,20 €

Your monthly premium in retirement: 267,60 €

*without consideration of contribution rate adjustments

What changes in the pension if you have private insurance?

As a privately insured pensioner, little changes formally at first - you continue to pay your contribution regardless of the amount of your income.

However, the composition of this contribution is now different:

Premium reliefs in private health insurance

Premium reliefs involves paying an additional amount on top of your private health insurance premiums in return for reduced premiums after retirement.

If you are privately insured, you can proactively reduce the premiums you will pay during retirement by making an additional monthly payment on top of your premiums. These additional payments are known as premium relief components (Beitragsentlastungskomponente – BEK).

In most cases, these payments are partially subsidized through either employer contributions or, in the case of self-employed people, by the fact that these additional payments are tax-deductible. In addition, although your health insurance premiums are likely to rise to reflect inflation, such influences will not affect your premium relief components.

The additional payments you make to obtain guaranteed reductions in your premiums once you retire are invested by your insurance provider. At ottonova, we tend to be conservative in the investment returns we offer, so that we can avoid the need to increase premiums to cover the cost. However, premium relief components represent a very safe investment for later in life – and the earlier you start paying them, the higher your returns will be.

This is what your PKV contribution could look like in retirement:

Your state pension per month: 2.400 €
Your PKV premium (upon entry at the age of 32): 573,03 €

From the age of 60 minus:

From retirement minus:

From 67 with contribution component benefit (BEK):

Pension insurance allowance

Your monthly premium in retirement: 170,93 €

*without consideration of contribution rate adjustments

Private health insurance is unaffordable in old age?

The prejudice that private health insurance premiums rise so much in old age that no one can afford them persists. But only 0.5% of all retirees pay more than the maximum public health insurance contribution. This means that the current burden of private health insurance contributions on pensioners is not as dramatically high as is often suggested.

What are the advantages of private health insurance?

What are aging reserves?

If you take out a standard policy with a private health insurance provider in Germany, your premiums will include aging reserves also called old-age provisions (Altersrückstellungen).

Please note that old-age provisions are only accrued as part of private health insurance policies. People in Germany with public health insurance pay old-age pension contributions as part of their premiums instead.

The younger you are when you enter the private health insurance system, the lower your premiums will be. One reason for this is that it enables you to start putting aside aging reserves earlier in life, rather than having to pay more to make up ground later on.

Aging reserve accrue interest over time. That can be used to help bring down premiums in later life, thereby counteracting the rising cost of health insurance.

Expats are exempt from the obligation to put aside old-age provisions in the private health insurance system for up to five years. This is part of the reason we are able to offer a special Expat tariff at ottonova.

If you leave Germany indefinitely after putting aside old-age provisions you will not be able to withdraw this money and it will be retained by the insurance collective.

However if you leave Germany with the intention of returning at a later date, you should ask your insurance provider to freeze your contract, which should enable you to retain your provisions.

Reserves and actuarial interest at ottonova.

Benefits and premiums in private health insurance are independent of demographic change. However, interest rates play a more important role. In order to keep premiums stable in old age, private insurance companies use an actuarial interest rate.

Older contracts were calculated with a higher interest rate (up to 3.5%) than can be earned at the moment, which means that in the current low-interest phase, the interest on the aging provisions is lower than calculated. The calculated interest rate has been reduced several times and is therefore one of the reasons why

that private health insurance premiums have risen more sharply in some cases than in statutory health insurance.

Not all private health insurances are the same:

When comparing offers, also find out what reserves the insurance company builds up and where and how these are invested. ottonova, for example, builds up high reserves for you. We invest around 50% of your premium - and conservatively: ottonova assumes an interest rate of 1.25% per year - which is around 1.25% below the market average.

If we had the same actuarial interest rate as other providers, your premium would be around 15% lower today. In the long term, however, you will be independent of the financial market and financial policy. And we calculate that the ottonova actuarial interest rate will have converged to the average in five to ten years. When this change is complete, the cost advantage of 15% will be noticeable.

If you opt for private health insurance, there is one important principle for relaxed aging: Cheap tariffs are not worth it. Because at the latest in old age, when you are ill more often, the gaps in benefits of these tariffs drive your costs up to dizzying heights. In addition, these plans have fewer provisions for old age. If you haven't put money aside elsewhere or can't return to the public health insurance (GKV), the only way out is the basic tariff. This costs at most as much as the maximum contribution to the GKV. By taking into account the aging reserves when changing to the basic tariff, the contribution is still below the maximum contribution in the GKV. The Internet is full of such horror stories, but you can easily avoid them by not letting yourself be fooled by su

FAQs about premiums for private health insurance in old age

After your policy is finalized it will not be adjusted again based on the variables of aging, increases in health care needs or increases in salary.

All private health insurers invest a large part of their premiums to increase the amount of money that will be required to cover the higher healthcare costs in old age. Currently, an actuarial interest rate greater than 2.5% is expected on the market. However, this does not correspond to interest rates for investments at this time. Consequently, premiums that were once cheaper will inevitably become more expensive in the future in order to compensate for these losses.

ottonova expects an interest rate of 1.25%, which corresponds to the current capital market. Our premiums are, therefore, not much cheaper today, but they will also be more stable. That’s because we are likely to increase the money in the same way we have calculated it.

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Espen Markus Mjøs
HIER SCHREIBT Espen Markus Mjøs

Espen Markus - originally from Norway - is sales agent in ottonova's English sales team. He's in contact with potential customers every day and answers Expats' questions about German health insurance.

ottonova sales experts
HIER SCHREIBT ottonova sales experts

Our ottonova team of experts has over 40 years of experience in private health insurance and answers questions about it every day. What are old-age provisions and for whom does private health insurance make sense? What is the actuarial interest rate and which tariff is right for you? They know!