Munich - Life Insurance
Life Insurance, 'Lebensversicherung'
There are many different insurance components that make up life insurance. The average policy costs between 80 and 140 Euros per month, and is around 5 Euros cheaper for women. Some policies have an 'Abrufoption' (withdrawal option) so that if you survive to retirement you can choose to withdraw the money (plus accumulated interest) in a lump sum, or as a regular pension payment.
A specified amount is paid out in full when you die. If you reach retirement age you can either be paid in a lump sum or as a pension.
Provision for old age, 'Altersvorsorge':
The old-age pension is made up of three components: a state pension, a pension from the company you worked for, and your own private savings. Altersvorsorge is a guaranteed private pension investment that pays back your contributions, plus (unguaranteed) interest, when you reach retirement age.
Insurance against paying inheritance tax, 'Erbschaftssteuerversicherung':
In 1997 a new law was passed making changes to the amount of tax heirs and beneficiaries must pay for inherited goods. This tax starts at 7% for immediate family who inherit amounts of 52 000 euros or less, and increases to 50% depending on the amount inherited and the relationship to the deceased. There are some tax exemptions for particular goods and amounts below a certain threshold for heirs. The Erbschaftssteuerversicherung is taken out in addition to life insurance by the person who is expecting to die, leaving their many worldly goods to distribute, or by one of their heirs on their behalf.