Dialog Term Life Insurance for Construction Financing: Your Protective Shield for Your Home
7 Jun 2025
Katrin Straub
Managing Director at nextsure
A home of your own is a big step, often tied to long-term mortgage financing. But what happens if the main earner's income unexpectedly disappears? A Dialog term life insurance can protect your mortgage and save your loved ones from financial ruin.
The topic in brief and concise terms
A term life insurance policy is essential when taking out a mortgage to protect the family from the loss of their home in the event of the main earner's death; banks may even require it.
The cost of a term life insurance policy depends on factors such as the sum insured, term, age, and health; a reducing sum insured can lower premiums.
Die Dialog Versicherung offers special conditions for construction financing such as a short application with only two health questions for insurance sums up to 500,000 euros.
Fundamental Protection: Why Term Life Insurance is Indispensable for Mortgage Financing
The dream of owning a home is a central life goal for many families, often associated with decades-long mortgage financing. If the main breadwinner unexpectedly becomes unavailable, this can quickly turn into an existential threat for the survivors. In such cases, a term life insurance policy intervenes and covers the outstanding loan amount. Some banks even require the conclusion of such a policy for loans that exceed eighty percent of the property's value. The primary purpose is to protect the family, allowing them to keep the house even in the worst-case scenario. Even when not explicitly required by the bank, a term life insurance policy with a mortgage is usually very sensible. The emotional burden of a death should not be exacerbated by financial worries about the home.
Keep an Eye on Costs: What a Term Life Insurance for Home Financing Costs
The premiums for a term life insurance policy aimed at securing a mortgage depend on several factors. These include the sum insured, the term, the age and health condition of the insured person, as well as the occupation and any hobbies that may present risks. For example, a 37-year-old non-smoking woman with a sum insured of two hundred fifty thousand euros and a term of fifteen years pays approximately twelve euros and fifty-three cents monthly. For a 32-year-old non-smoking man with a decreasing sum insured initially set at five hundred thousand euros over twenty years to secure a property loan, the costs can be around nine euros and eighty-one cents per month. By opting for a decreasing sum insured that aligns with the outstanding balance, premiums can often be reduced. A sensible term life insurance policy is often more affordable than many expect. This investment safeguards liabilities in six-figure amounts in the event of a serious incident.
Tailored Protection: Choose the Right Insurance Sum and Term
The amount of the insurance sum should at least match the full loan amount of your mortgage finance. Experts often recommend securing an additional three to five times your gross annual income to cover ongoing living expenses. The term of the term life insurance must cover the entire repayment period of the loan, not just the initial fixed interest period of perhaps ten or fifteen years. Although early termination is possible, it generally does not result in a premium refund. There are various models for the insurance sum:
Constant insurance sum: Remains the same throughout the entire term and is suitable if, in addition to the loan, living expenses are also to be covered.
Linear decreasing insurance sum: Decreases annually by a fixed amount, which reduces the premiums.
Annuitant decreasing insurance sum: Adapts to the decreasing residual debt of the loan and is often the most cost-effective option for pure loan security.
Careful planning of the sum and term is crucial for comprehensive protection. For example, Dialog Versicherung offers various sum progressions with RISK-vario®, including annuitant decreasing options. This allows flexible adjustment to your financial situation.
Dialog Risk Life Insurance: Specific Advantages for Builders
Dialog Lebensversicherungs-AG, a company of the Generali Group, offers special products for securing construction financing. An advantage is the short application with only two health questions for construction financing up to an insured sum of five hundred thousand euros. This greatly simplifies the completion process. Tariffs like RISK-vario® Premium provide additional benefits, such as a construction bonus or a temporary increase in benefits of ten percent (up to a maximum of thirty thousand euros) if death occurs within one year of acquiring the property. Such specific clauses can make an important difference in an emergency. Dialog Insurance places emphasis on clear definitions, for example regarding pre-existing conditions that do not need to be disclosed. It is advisable for developers to examine the exact terms and options.
Understanding Legal Aspects and Alternatives
Term life insurance is the most common method for securing a building loan, but there is also the credit balance insurance. This is often more expensive and less flexible, but it can also cover risks such as unemployment. Legally, term life insurances are subject to the German Insurance Contract Act. It is important to provide all required information accurately on the application. Incorrect information can lead to a refusal of benefits. In the event of a claim, that is, with the payout of the term life insurance, the agreed sum is paid to the designated beneficiary. Make sure who is registered as the beneficiary to ensure that the money is used as intended. It is important to know when a term life insurance does not pay out, for example, in cases of suicide within the first few years or undisclosed pre-existing conditions. The exact terms can always be found in the respective contract documents.
Conclusion: Secure the foundation with foresight
A Dialog term life insurance can be a crucial component for the security of your property financing and your family. The costs are often lower than expected, especially when considering the potentially covered amount of several hundred thousand euros. By selecting the appropriate insurance sum, duration, and tariff options, such as those offered by Dialog with RISK-vario®, an individual and needs-based protection can be arranged. The protection of the biggest financial project in life should not be taken lightly. A life insurance as security when buying a house provides peace of mind and protects against unforeseen risks. Also, consider securing your family with a term life insurance for family protection. Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive concrete suggestions for optimisation.
More useful links
The German Insurance Association (GDV) offers a publication with current figures on German life insurance in 2024.
Statista provides comprehensive statistics and information on the topic of life insurance in Germany.
The University of St. Gallen provides a study on term life insurance in Germany.
Wikipedia offers a basic overview and definition of term life insurance.
Statista illustrates the development of mortgage interest rates in Germany based on current survey data.
The German Bundesbank publishes detailed statistics on interest rates for housing loans to private households.
The Federal Statistical Office (Destatis) offers information on construction prices and the property price index in Germany.
FAQ
Was passiert, wenn ich während der Laufzeit meiner Baufinanzierung sterbe und keine Risikolebensversicherung habe?
Ohne Risikolebensversicherung geht die Schuldenlast auf Ihre Erben über. Können diese die Raten nicht tragen, droht im schlimmsten Fall der Verkauf der Immobilie, oft unter Wert.
Sollte ich eine konstante oder eine fallende Versicherungssumme wählen?
Zur reinen Absicherung der Restschuld einer Baufinanzierung ist eine fallende (oft annuitätisch fallende) Versicherungssumme meist passender und günstiger. Soll auch der Lebensunterhalt der Familie gesichert werden, kann eine konstante Summe oder eine Kombination sinnvoll sein.
Wie lange sollte die Laufzeit meiner Risikolebensversicherung für die Baufinanzierung sein?
Die Laufzeit sollte die gesamte Tilgungsdauer Ihres Darlehens abdecken, also bis die letzte Rate bezahlt ist, nicht nur die Dauer der ersten Zinsbindung.
Kann ich meine Risikolebensversicherung später noch anpassen?
Viele Tarife, auch bei der Dialog, bieten Nachversicherungsgarantien. Damit können Sie bei bestimmten Lebensereignissen (z.B. Geburt, Heirat, Immobilienerwerb) die Versicherungssumme ohne erneute Gesundheitsprüfung erhöhen.
Was ist der Unterschied zwischen einer Risikolebensversicherung und einer Restschuldversicherung bei der Baufinanzierung?
Die Risikolebensversicherung zahlt im Todesfall eine vereinbarte Summe aus. Die Restschuldversicherung ist oft direkt an den Kredit gekoppelt, meist teurer und weniger flexibel, kann aber manchmal auch andere Risiken wie Arbeitslosigkeit abdecken.
Müssen unverheiratete Paare bei der Risikolebensversicherung zur Baufinanzierung etwas Besonderes beachten?
Ja, der steuerliche Freibetrag für Erbschaften ist für Unverheiratete mit zwanzigtausend Euro deutlich niedriger als für Verheiratete. Eine geschickte Vertragsgestaltung (Versicherungsnehmer = bezugsberechtigte Person) kann helfen, Erbschaftssteuer zu vermeiden.
