Investment & Wealth
Basic Ability Insurance
cancel basic abilities insurance
Cancelling Occupational Disability Insurance: Strategies for 2025 and Sensible Alternatives
Are you considering cancelling your basic ability insurance? This step should be carefully considered as it involves financial risks and can mean the loss of important protection. Learn about the applicable deadlines, the potential drawbacks, and the smarter alternatives to cancellation in 2025.
The topic in brief and concise terms
Cancelling a disability insurance policy is usually associated with financial disadvantages and the loss of insurance coverage; alternatives such as premium deferral or reduction should always be considered first.
The notice periods are generally one to three months, and the termination must be made in writing.
A new policy after cancellation is often more expensive and can be difficult or impossible due to changed health conditions.
Cancelling disability insurance: What you should know
The decision to cancel a basic ability insurance policy is often associated with financial considerations. Before taking this step, it is important to carefully examine the contractual conditions. The notice periods are usually one to three months at the end of the insurance period or on the next premium payment date.
Cancellation generally results in the insurance being converted into a premium-free policy with a reduced pension. If this premium-free minimum pension does not reach a certain value, the contract may also end completely. The loss of insurance coverage is a significant disadvantage that should be taken into account. Therefore, carefully consider whether a cancellation is really the best solution for your situation.
What are the disadvantages of termination?
Cancelling a basic ability insurance policy can have several negative consequences. The most obvious disadvantage is the loss of financial protection in the event of losing a basic ability. This can lead to significant additional costs in daily life if, for example, you are no longer able to work. Another issue is the health check required when taking out a new policy.
A new contract is usually more expensive because your entry age is higher and your health condition may have worsened. In the worst-case scenario, you might not receive any new insurance coverage at all. Also consider that premiums already paid may not be refunded or only partially refunded when cancelling a risk insurance like the basic ability insurance. A cancellation of the occupational disability insurance carries similar risks.
Alternatives to Termination: Bridging Financial Gaps
Before cancelling your basic ability insurance, you should consider alternatives, especially in the event of financial difficulties. Many insurers offer flexible solutions. One option is to reduce the insurance benefits in order to lower the premium. Another option is the deferral of contributions for a certain period.
Here is an overview of possible alternatives:
Premium Reduction: Reduce the insured pension and thereby your monthly costs.
Premium Deferral: Suspend premium payments for an agreed period.
Premium Exemption: Convert your policy into a premium-free insurance, which leads to a lower pension in the event of benefits.
Change Payment Method: Switch, for example, from annual to monthly payments to spread the burden.
Our Expert Tip: Always speak with your insurer or an independent advisor first to find the solution that suits you best. Sometimes an internal tariff change is also an option to save costs without completely giving up protection. The question What is a basic ability insurance exactly, helps you better assess the value of your policy.
When is termination nevertheless unavoidable?
Although cancelling a policy is usually disadvantageous, it can be unavoidable in rare cases. This might be the case if your life circumstances have drastically and permanently changed, and the insurance coverage is no longer needed. An example would be if you were able to secure more comprehensive coverage, such as a high-performance disability insurance, on better terms.
Even if, after considering all alternatives, the financial burden of the premiums is no longer sustainable, cancellation may be the last resort. Weigh this decision carefully and consider the potential loss of protection for important basic capabilities. A comparison of basic capability and disability insurance can provide clarity in this matter.
Expert Depth: Legal Aspects and Pitfalls
From a legal perspective, termination is a right of shaping that you, as the policyholder, are entitled to. The exact terms for this can be found in the Insurance Contract Act (VVG) and in your General Insurance Conditions (AVB). Particular caution is advised with incorrect information in the application, as this can lead to issues even years later. The taxation of a potential future pension from the basic ability insurance is carried out with the yield portion, the amount of which depends on the duration of the pension.
Note that if you receive social benefits, such as unemployment benefit II, a private basic ability pension may be taken into account, which could lead to reductions. Therefore, comprehensive income protection should always be considered holistically. The question of which insurances are tax-deductible can also be relevant in this context.
nextsure Conclusion and Recommendations for Action
Terminating a basic ability insurance should always be the last option. The loss of coverage and the disadvantages of potentially taking out a new policy often outweigh the short-term financial relief. Carefully consider all alternatives, such as reducing premiums, deferral, or converting to a non-contributory insurance policy. In many cases, this allows you to maintain essential coverage for your basic abilities, even in financially tight situations. An adjustment of old insurance policies is often more sensible than a hasty termination.
At nextsure, our mission is to offer you tailored and easy-to-understand insurance solutions. We support you in analysing your individual situation and making the best decision for your financial security. Informed advice can help you avoid long-term disadvantages.
Request a personalised risk analysis now: Have your insurance situation checked for free and receive specific optimisation suggestions.
More useful links
Wikipedia provides a comprehensive overview of basic skills insurance.
Deutsche Rentenversicherung offers information on reduced earning capacity pensions.
Bundesgesundheitsministerium provides information about the need for care and related benefits.
DGUV provides figures and facts about statutory accident insurance.
Bundesanzeiger is the official portal for publications and announcements in Germany.
FAQ
How do I correctly cancel my basic ability insurance?
The cancellation must be in writing (by letter or email), including your insurance number and observing the cancellation period (usually one to three months before the end of the term or the next payment date). Request a confirmation of the cancellation.
What deadlines do I need to observe when cancelling basic ability insurance?
The cancellation periods are specified in your insurance contract. It is common to have periods of one month or three months at the end of the insurance period or the next premium due date.
Will I lose my money if I cancel the basic ability insurance?
With a pure risk insurance like basic ability insurance, there is generally no surrender value as with a capital-forming insurance. The premiums paid serve risk protection. Cancellation often leads to conversion into a non-contributory sum or loss of coverage.
What are the disadvantages of cancelling basic ability insurance?
The main disadvantages are the loss of insurance coverage, potentially higher costs, a renewed health examination upon new conclusion, and the possible loss of premiums already paid.
Are there better options than cancelling if I can no longer pay the premiums?
Yes, consider options such as premium reduction, premium deferral, or conversion into a paid-up insurance. Talk to your insurer about this.
Can my insurer cancel my basic ability insurance?
An insurer can cancel under certain circumstances, for example, in cases of fraudulent deception or breach of pre-contractual disclosure obligations. Ordinary cancellation by the insurer is uncommon for life insurances like basic ability insurance, as long as the premiums are paid.
