Choosing the right insurance: Wise decisions for protection
In the ever-changing landscape of insurance, understanding what is mandatory, recommended, and less sensible can be challenging. Here's a breakdown of various insurance types in Germany, based on their necessity and benefits.
Mandatory Insurance
Germany mandates several insurance types for its citizens, ensuring financial security and peace of mind.
- Health Insurance (Krankenversicherung): Compulsory for everyone in Germany since 2009. Coverage includes statutory public health insurance (Gesetzliche Krankenversicherung, GKV) for about 90% of residents and private health insurance for the rest. Employer and employee share contributions if salaried and earning less than €73,800 annually. Self-employed or unemployed persons pay themselves.
- Accident Insurance (Unfallversicherung): Also mandatory and co-financed by employers and employees, covering workplace and commuting accidents.
- Long-term Care Insurance (Pflegeversicherung): Mandatory to cover long-term nursing care needs, jointly financed like health insurance.
Recommended Insurance
While not legally compulsory, these insurance options are strongly advised for financial protection.
- Liability Insurance (Haftpflichtversicherung): Often recommended as it covers damages you cause to others and is considered essential for individuals in Germany.
- Private supplementary health insurance: To enhance public health coverage with better hospital conditions or dental benefits; optional but beneficial.
- Legal Insurance (Rechtsschutzversicherung): Recommended for covering legal fees in disputes, useful but not mandatory.
Less Sensible or Optional Insurance
These insurance options may not be necessary for everyone, depending on personal risk tolerance and financial situation.
- High-deductible or private insurance plans with limited coverage: May save money but are less sensible for those needing comprehensive care.
- Expensive private insurances duplicating statutory benefits without significant added value, particularly if public health insurance suffices.
Other Insurance Types
- Household contents insurance: Covers the cost of furniture or electronic devices if they are damaged or stolen.
- Professional liability insurance: Required for certain professions, such as doctors, notaries, lawyers, tax advisors, auditors, architects, insurance intermediaries, and credit intermediaries.
- Dog or horse liability insurance: Depending on the state, mandatory for those who own a dog or a horse to cover damages caused by their animal.
- Private pension provision: Recommended to avoid old-age poverty, as the pension provided to formerly employed German citizens may not be sufficient for everyone.
- Spectacles Insurance: Provides only 100 to 400 euros every three years; it's more cost-effective to save for new glasses.
In conclusion, health, accident, and long-term care insurances are the mandatory basics, with liability and legal insurances strongly recommended. Private pension provision and professional liability insurance are also essential for certain groups. However, it's essential to weigh the benefits against the costs and personal circumstances to make informed decisions about less sensible or optional insurance options.
In the realm of German business and finance, it's crucial to navigate the mandatory, recommended, and less sensible insurance options for both personal and professional protection. Given the mandatory insurance types, businesses should ensure they comply with health, accident, and long-term care insurances for their employees. Furthermore, liability and legal insurances are strongly recommended for additional financial security and protection.
