Cancelling hospital daily allowance insurance: deadlines, rights and smart alternatives for your cover
10.05.25
9
Minutes
Katrin Straub
Managing Director at nextsure
Are you thinking about cancelling your hospital daily benefit insurance? Cancelling it should be carefully considered, as there are deadlines and pitfalls. Find out here how to proceed and what options you have.
The topic in brief and concise terms
Ordinary termination of a hospital daily allowance insurance policy is usually possible with three months’ notice at the end of the insurance year.
In the event of premium increases, there is often a special right of cancellation with a shorter notice period (e.g. two months after notification).
A cancellation should be carefully considered, as ageing reserves are lost and a new policy may be more expensive or more difficult to take out.
Understanding cancellation: standard notice periods and the insurance year
Ordinary termination of your hospital daily allowance insurance is generally possible at the end of each insurance year. In most cases, the insurance year corresponds to the calendar year, so the contract ends on 31 December. It is crucial to observe a notice period of usually three months. This means your notice of termination must be received by the insurer no later than 30 September if the insurance year ends on 31 December. Some contracts may specify a minimum term of one or two years before ordinary termination is possible for the first time. Therefore, always check your individual policy terms. A template for termination can help you include all the necessary details. You can find the exact details of deadlines and terms in your insurance documents. This initial review of your policy is crucial for the next steps.
Using your special right to cancel: When you can terminate early
In addition to ordinary termination, there are situations that grant you a special right of termination. A common reason is an increase in premiums by the insurer. If your insurance company informs you about rising premiums, you can terminate the contract extraordinarily. The deadline for this is usually two months after receipt of the notification of the increase, sometimes only four weeks. The cancellation then takes effect at the time the premium increase would come into force. A special right of termination may also exist in the case of certain tariff adjustments on the part of the insurer. It is advisable to send the cancellation letter by registered post with acknowledgement of receipt in order to have proof of timely delivery. A correctly worded letter is essential here. This right enables you to respond more flexibly to contractual changes.
The termination letter: form and content for an effective declaration
Written form is mandatory for cancelling your hospital cash insurance. An informal letter is sufficient, but it should contain certain minimum details to ensure smooth processing. These include:
Your full name and address
The policy number of your hospital cash insurance policy
The date on which you wish to cancel (e.g. “as soon as possible” or “DD.MM.YYYY”)
A clear statement that you are cancelling the contract
Your handwritten signature
Also request written confirmation of the cancellation in the letter, stating the termination date. This gives you certainty that your declaration is effective. Keep a copy of the cancellation letter and proof of posting carefully. A sample cancellation letter can serve as guidance. Observing these formalities prevents delays and misunderstandings.
Legal foundations: What does the Insurance Contract Act (VVG) say?
The Insurance Contract Act (VVG) governs the rights and obligations of insurers and policyholders. For hospital daily allowance insurance, Section 206 VVG is relevant, particularly with regard to the insurer’s right of cancellation. Accordingly, the insurer may cancel a hospital daily allowance insurance policy that is not held alongside health cost insurance within the first three policy years. The notice period for the insurer is also three months to the end of the policy year. For you as the policyholder, the cancellation periods and conditions agreed in the contract are decisive and must remain within the framework of the statutory requirements. It is important to know the difference between the various daily allowance insurances, as the rules may vary. Familiarity with the legal framework strengthens your position.
Expert depth: Possible disadvantages and alternatives to termination
Before cancelling your hospital daily allowance insurance, you should consider the possible disadvantages. A key point is the loss of the accumulated ageing reserves. These reserves help keep premiums stable in later life. If you later take out a new policy, particularly at an older age or if your health situation has changed, premiums may be significantly higher, or you may face risk loading or even refusal. Our expert tip: Weigh the benefits of your current cover against the costs and risks of taking out a new policy. An alternative to cancellation could be an adjustment of your tariff within your existing policy if lower premiums are desired. Sometimes reducing the insured daily benefit amount is also an option to lower the financial burden without giving up cover altogether. Also consider how long sickness benefit is generally paid, so that you can assess your needs more accurately. A well-informed decision requires considering all options.
Practical section: What happens after termination?
After your cancellation has taken effect, your insurance cover ends on the confirmed date. You will no longer receive any benefits under this contract for hospital stays that begin after the contract end date. If you have already paid premiums in advance that extend beyond the end of the contract (e.g. with annual payment), you are entitled to a proportional refund of those premiums. It is important to arrange alternative insurance cover at an early stage if you still need it. Bear in mind that if you take out a new hospital cash insurance policy, you will again need to answer health questions, and waiting periods of up to three months or even eight months may apply for certain benefits. Many people underestimate the significance of waiting periods when taking out a new contract. An assessment of whether such insurance makes sense should take your personal life situation into account. Seamless cover should be the goal if you still want protection.
Particular caution is advised with older insurance contracts. They often still include more favourable terms or more comprehensive benefits than newer policies. Cancelling them means permanently losing these advantages. Before cancelling an existing hospital cash insurance policy, check the terms of your previous policy carefully. Compare them with current offers not only in terms of price, but also with regard to exclusions, waiting periods and flexibility. Sometimes it may make more sense to adjust an existing contract rather than cancel it completely and take out a new one with potentially less favourable terms. Our expert tip: Seek independent advice before cancelling or changing old insurance contracts. A professional assessment can help you make the best decision for your protection in the long term. This helps protect you against unwelcome surprises.
Request your individual risk analysis now: Have your insurance situation checked free of charge and receive specific suggestions for improvement.
More useful links
On Gesetze im Internet, you will find the full text of Section 92 of the Insurance Contract Act (VVG), which governs important provisions for insurance contracts.
Section 11 of the Insurance Contract Act (VVG) is also available on Gesetze im Internet and provides further insight into the legal basis of insurance contracts.
The Lower Saxony Consumer Advice Centre offers a practical sample letter in PDF format for the ordinary 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 insight into the latest hospital statistics.
FAQ
What cancellation period do I need to observe for hospital daily allowance insurance?
As a rule, the ordinary notice period is three months to the end of the insurance year. If your premium is increased, you usually have a special right of cancellation with a period of two months after receipt of the notice of change.
Can I cancel my hospital daily allowance insurance at any time?
No, ordinary termination is only possible in compliance with the contractual notice period at the end of the insurance year. A special right of termination exists, for example, in the event of premium increases.
What should be included in my cancellation letter for hospital daily allowance insurance?
The letter should include your name, address, insurance number, the desired cancellation date (or “as soon as possible”) and your signature. Please ask for written confirmation.
Will I lose money if I cancel my hospital daily allowance insurance?
You generally lose the accumulated age provisions. Taking out a new policy later may be more expensive. Premiums already paid for periods after cancellation will be refunded on a pro rata basis.
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, ordinary termination is often not possible. Please check your contract documents.
What is the difference between sickness benefit and hospital daily allowance?
Sickness benefit is an earnings replacement benefit from statutory health insurance in the event of incapacity for work. Hospital daily benefit is a private supplementary benefit that pays an agreed amount per day in hospital, regardless of loss of income.
