Insurance

Life Insurance Value

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Life Insurance Value. If you have to terminate life insurance prematurely, the insurer will reimburse the surrender value. Since there are high cancellation costs, this is a loss for the insured.

Financial bottlenecks or serious illnesses cause insured persons to terminate their life insurance policies early. This happens much more often than most people think. Experts estimate that every second life insurance policy is cancelled early. Before you cancel, you should carefully check that there are no alternatives to this step. The surrender value achieved is well below the sum of the capital saved, as high cancellation costs are due.

Factors that play a role in calculating the surrender value:

  • -Sum of the contributions paid
  • -Accrued interest
  • -Term of the contract
  • -Commissions, administration and risk costs

Calculation of the surrender value

The acquisition costs are initially deducted from the so-called reserve capital – these are the contributions you have paid into your life insurance. Since these are very high, you will get nothing if you cancel after a short term. The amount of the cancellation costs is around 1% of the sum insured. The calculation of the minimum surrender value has been regulated by Section 169 of the Insurance Contract Act (VVG) since 2008, as the calculation repeatedly leads to disputes between the contracting parties. In the case of contracts concluded between 2001 and 2007, the surrender value must be at least 50% of the cover capital.

Information about the amount of the surrender value

There are some portals on the Internet with which the insured can determine the surrender value of a life insurance policy. To do this, you need to provide the name of the insurance company, amount, start time and last premium payment. However, the surrender value calculated in this way should only be used as a guide. Only your insurer can tell you the exact amount of the surrender value.

Alternative to terminating life insurance

It is possible to sell life insurance under certain conditions. Since buyers are based on the intrinsic value of life insurance, the sales value is around 5 – 15% above the surrender value. You have a chance of finding a buyer if the surrender value of your life insurance is at least 10,000 euros and has a remaining term of 15 years.


However, since there are also black sheep in this market, you need to be careful and examine offers carefully. To be on the safe side, you should find out whether the buyer is a member of the Federal Association of Asset Investments in the Secondary Life Insurance Market (BVZL).

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