Cancelling hospital daily allowance insurance: Deadlines, rights, and smart alternatives for your coverage
10 May 2025
9
Minutes
Katrin Straub
CEO at nextsure
Are you considering cancelling your hospital daily allowance insurance? It's important to think carefully about this decision, as there are deadlines and pitfalls. Find out here how to proceed and what options you have.
The topic in brief and concise terms
The regular termination of a hospital daily allowance insurance is usually possible with a three-month notice period at the end of the insurance year.
In the event of premium increases, there is often a special termination right with a shorter notice period (e.g. two months after notification).
A cancellation should be carefully considered, as age-related provisions may be lost and a new contract could be more expensive or difficult.
Understanding Termination: Standard Deadlines and the Insurance Year
The regular termination of your hospital daily allowance insurance is generally possible at the end of each insurance year. Most of the time, the insurance year corresponds to the calendar year, so the contract ends on 31 December. It is crucial to observe a cancellation period, usually three months. This means your termination letter must reach the insurer by 30 September if the insurance year ends on 31 December. Some contracts may stipulate a minimum contract duration of one or two years before a regular termination is possible for the first time. Therefore, always check your individual contract terms. A template for termination can help you to include all necessary details. You will find the exact details on deadlines and terms in your insurance documents. This initial analysis of your policy is crucial for the next steps.
Exercising Special Termination Rights: When You Can Terminate Extraordinarily
Besides the ordinary termination, there are situations that grant you a special right of termination. A common reason is an increase in contributions by the insurer. If your insurance company informs you about increasing premiums, you can terminate the contract extraordinarily. The deadline for this is usually two months after receiving the notification of the increase, sometimes only four weeks. The termination then becomes effective at the point when the contribution increase would take effect. A special right of termination may also exist for certain tariff adjustments by the insurer. It is advisable to send the termination letter by registered post with return receipt to have proof of timely delivery. A correctly formulated letter is essential in this case. This right allows you to react more flexibly to contract changes.
The notice of termination: Form and content for an effective declaration
For the termination of your hospital daily allowance insurance, written form is mandatory. An informal letter is sufficient but should contain certain minimum information to ensure smooth processing. These include:
Your full name and address
The insurance number of your hospital daily allowance policy
The date on which you wish to terminate (e.g., "at the earliest opportunity" or "on DD.MM.YYYY")
A clear statement that you are terminating the contract
Your handwritten signature
In the letter, also request written confirmation of the termination, stating the termination date. This gives you assurance of the effectiveness of your declaration. Keep a copy of the termination letter and the proof of dispatch safely. A template for cancellations can serve as a guide. Observing these formalities prevents delays and misunderstandings.
Legal foundations: What does the Insurance Contract Act (VVG) say?
The Insurance Contract Act (VVG) regulates the rights and obligations of insurers and policyholders. For hospital daily allowance insurance, § 206 VVG is relevant, especially regarding the insurer's right to terminate. Accordingly, the insurer can terminate a hospital daily allowance insurance that does not coexist with a health cost insurance within the first three insurance years. The notice period for the insurer is also three months to the end of the insurance year. As a policyholder, the notice periods and conditions agreed in the contract are decisive, and these must comply with legal requirements. It is important to know the difference between various daily allowance insurances, as the regulations can vary. Understanding the legal framework strengthens your position.
Expert Depth: Potential Disadvantages and Alternatives to Termination
Before cancelling your hospital daily benefit insurance, consider the potential disadvantages. A key point is the loss of accumulated age reserves. These reserves help to keep contributions stable in old age. In the event of a later new contract, especially at an older age or with a changed health situation, contributions can be significantly higher or risk surcharges may be threatened or even a rejection. Our expert tip: Weigh the benefits of the current insurance against the costs and risks of a new contract. An alternative to cancellation could be a tariff adjustment within your existing insurance if lower contributions are desired. Sometimes reducing the insured daily benefit amount is also an option to reduce the financial burden without completely giving up protection. Consider how long daily sickness benefits are generally paid to better assess the need. A well-founded decision requires consideration of all options.
Practical Part: What happens after the termination?
After your cancellation becomes effective, your insurance coverage will end at the confirmed time. You will no longer receive benefits from this contract for hospital stays that begin after the contract ends. If you have already paid contributions in advance that extend beyond the end of the contract (e.g., with annual payment), you are entitled to a pro-rata refund of these contributions. It is important to arrange alternative insurance coverage early if there is still a need. Keep in mind that when taking out a new hospital daily allowance insurance, health questions must be answered again, and waiting periods of up to three months, or even eight months for certain benefits, may apply. Many people underestimate the importance of waiting periods when entering into a new contract. An analysis of the sensibility of such insurance should take one's own life situation into account. Achieving comprehensive coverage should be the goal if continued protection is desired.
Our expert tip: Don't rush to change old contracts
Particular caution should be exercised with older insurance policies. These often contain more favourable terms or more comprehensive benefits than newer policies. Cancelling them means losing these advantages permanently. Before cancelling an existing hospital cash insurance policy, carefully review the conditions of your old contract. Compare them with current offers, not just in terms of price, but also regarding exclusions, waiting periods, and flexibility. Sometimes, it may be more sensible to adjust an existing contract than to cancel it altogether and enter into a new one which might have worse conditions. Our expert tip: Seek independent advice before cancelling or changing old insurance policies. A professional assessment can help you make the best decision for your protection in the long term, safeguarding you against any unpleasant surprises.
Request an individual risk analysis now: Have your insurance situation checked for free and receive specific optimisation suggestions.
More useful links
On Gesetze im Internet, you will find the full text of Section 92 of the Insurance Contracts Act (VVG), which regulates important provisions for insurance contracts.
Section 11 of the Insurance Contracts Act (VVG) is also available on Gesetze im Internet and provides further insights into the legal basis of insurance contracts.
The Consumer Advice Centre Lower Saxony offers a practical template letter in PDF format for the proper termination of insurance contracts.
The Federal Statistical Office (Destatis) provides detailed information and statistics on hospitals in Germany.
A recent press release from the Federal Statistical Office (Destatis) offers insights into the latest hospital statistics.
FAQ
What notice period must I observe for the hospital daily allowance insurance?
Usually, the standard notice period is three months at the end of the insurance year. In the event of a premium increase, you generally have a special right of termination with a notice period of two months after receiving the change notification.
Can I cancel my hospital daily allowance insurance at any time?
No, an ordinary termination is only possible at the end of the insurance year, in compliance with the contractual notice period. A special right of termination exists, for example, in the case of premium increases.
What should be included in my notice of cancellation for the hospital daily allowance insurance?
The letter should include your name, address, insurance number, the desired cancellation date (or "at the earliest possible date"), and your signature. Request a written confirmation.
Will I lose money if I cancel my hospital daily allowance insurance?
You usually lose the accrued aging provisions. Reapplying later can become more expensive. Contributions already paid for periods after cancellation will be partially refunded.
Is there a minimum contract term for hospital daily allowance insurance?
Yes, many contracts have a minimum term of, for example, one or two years. Before this period expires, it is often not possible to terminate the contract in the usual way. Please check your contract documents.
What is the difference between sick pay and hospital daily allowance?
Sick pay is a wage replacement benefit provided by statutory health insurance in case of incapacity for work. Hospital daily allowance is a private supplemental benefit that pays an agreed amount per day in hospital, irrespective of loss of income.
