Lower Your PKV Premium: Internal Tariff Switch (Section 204 VVG)

An internal tariff switch under Section 204 of the German Insurance Contract Act (Versicherungsvertragsgesetz, VVG) is the most effective way to lower your PKV premium without changing insurance company. Policyholders keep the age-related reserves they have built up over the years in full. Switching to comparable, more modern tariffs at your own provider is enshrined in law and possible at any time. Important medical benefits are retained while the monthly financial burden often drops significantly.

Legal Basis and Mechanics of the Tariff Switch

The Foundation of Section 204 VVG

The legal basis for the internal switch is Section 204 of the German Insurance Contract Act (VVG). This section secures a fundamental right for privately insured people: to switch at any time to tariffs with comparable insurance cover at their existing insurer. The rights acquired under the old tariff and the age-related reserves built up over the years must be credited in full when switching internally [1]. This prevents the painful loss of accumulated capital that would inevitably occur when switching to a completely different insurance company. Switching to another provider usually leads to partial or total loss of these valuable reserves, meaning the calculation starts over from scratch. The law thus protects long-standing policyholders from a financial cost trap in old age and offers a powerful tool for cost control. This right is valuable. It is a powerful tool that every policyholder should know about, in order to keep their financial burden in old age predictable and affordable.

Transparency through Industry Guidelines

The German Association of Private Health Insurers (PKV-Verband) has developed specific guidelines to make this complex process transparent and customer-friendly. The tariff-switch guidelines allow privately insured people to choose the optimal tariff option at any time [3]. Under these guidelines, insurers are required to present alternative tariff offers on specific request. These offers must precisely account for and disclose the customer's individual age-related reserves. Newer, considerably more cheaply calculated tariffs often exist in the company's portfolio that are not actively offered to long-standing existing customers. This is exactly where the greatest potential savings for the policyholder lie hidden. Policyholders must take the initiative themselves to identify these hidden tariffs and formally trigger the switching process, since insurers rarely proactively advertise the cheapest alternatives on their own.

Risks from Ill-Considered Changes

A decisive factor in the mechanics of a tariff switch is strictly avoiding amateur mistakes. It is risky to change old insurance contracts without careful thought, since this can create irreversible disadvantages when it comes to reimbursement. A tariff switch necessarily requires a precise analysis of the underlying insurance conditions. Stiftung Warentest explicitly recommends the tariff switch under Section 204 VVG as the primary remedy against steadily rising premiums [2]. The legal safeguard ensures that the insurer may not refuse the switch as long as the target tariffs are open for new business or available to existing customers. This creates planning security and protects policyholders from being pushed, out of pure financial necessity, into unsuitable or weaker tariffs.

Cost Structure and Premium Trends in the PKV

Causes of Rising Premiums

The cost structure of private health insurance rests on the strict equivalence principle and medical inflation. Premiums rise continuously over the years in both statutory and private health insurance [4]. The trend in health insurance premiums is driven largely by rapid medical progress, the welcome increase in life expectancy, and the persistently low interest rate environment of the past decade. Insurers must adjust the previously high calculated discount rates downward, which inevitably leads to substantial premium adjustments for policyholders. These adjustments often happen in leaps and place a considerable burden on the monthly budget. This complex system therefore requires forward-looking planning and a deep understanding of the underlying actuarial calculation models used by insurance mathematicians.

The Problem of Closed Tariffs

A major cost driver in private health insurance is so-called closed tariffs. When a tariff is closed to new business by the insurer, the pool of remaining policyholders inevitably ages. No new young, healthy premium payers join this particular tariff anymore. As a result, the per-capita healthcare costs rise disproportionately, since older policyholders statistically use more medical services. This leads to a dangerous spiral of premium increases that financially overwhelms many long-standing policyholders. Switching to an open tariff breaks this spiral. The pool there is healthier, the age structure is more balanced, and premium trends generally run considerably more stable and predictable than in the aging closed pools.

Levers for Reducing Your Premium

Privately insured people have various ways to actively influence and optimize their premium [4]. Besides the internal tariff switch, deliberately increasing the contractual deductible can bring short-term financial relief. However, the deductible must be paid out of taxed income in the event of illness, whereas the regular health insurance premium is tax-deductible. A precise mathematical review of this option is essential. Adjusting daily sickness benefit (Krankentagegeld) to actual financial needs is another effective mechanism for reducing costs. Old daily sickness benefit rates are often oversized or no longer match the current income situation. This is an area where money can quickly be saved without jeopardizing basic medical care in the event of illness.

Retaining Benefits versus Saving on Premiums

Trade-Offs in Outpatient Benefits

Retaining benefits must be weighed extremely carefully against the potential financial savings in premium with every tariff switch. In practice, a significantly cheaper tariff almost always means noticeable cuts to certain benefit components. In particular, supplementary outpatient benefits such as extensive alternative-practitioner treatments, high-quality vision aids, or generous check-ups are often considerably reduced in newer, cheaper tariffs. Policyholders must define in advance precisely which medical benefits are absolutely indispensable to them and where compromises seem possible. Radically cutting benefits purely for cost reasons backfires in a serious case of illness through extremely high out-of-pocket payments. The risk is real. Quality comes before price, and an apparently large monthly saving can quickly be wiped out by a single expensive treatment.

Hidden Limits on Expensive Procedures

A classic example of hidden differences in benefits is private health insurance benefits for refractive eye surgery or expensive dental implants. While old premium tariffs often reimburse such procedures 100 percent, modern compact tariffs impose strict sum limits or narrow benefit catalogs here. Reimbursement rates for dentures also vary considerably, between 60 and 90 percent of the costs incurred. The internal tariff switch offers the major advantage that extra benefits from the old tariff can be retained in the new tariff through individual risk loadings. This preserves the accustomed level of cover. It requires careful review of the insurance conditions, so as not to accidentally fall into a cost trap for future medical needs.

Guidelines for Assessing Tariff Differences

The PKV-Verband has developed a practical guide to make the complex switching process easier for policyholders [1]. This guide stresses the absolute importance of a detailed, unsparing benefits comparison before signing. Switching to a tariff with a lower scope of benefits is possible at any time without a health assessment and is legally straightforward. However, if the policyholder later wants to switch back to a higher-value tariff, the insurer will inevitably require a new, strict risk assessment. The level of benefits should therefore not be lowered lightly or purely for price reasons. Rights once given up are hard to get back, and the path back to premium cover is often permanently blocked at an advanced age or if new pre-existing conditions have arisen.

Critical benefit areas to compare between tariffs

• Reimbursement rates for high-quality dentures and implants
• Open or closed catalog of medical aids (e.g. for wheelchairs)
• Cost coverage for psychotherapy and inpatient rehab
• Rules on senior-consultant treatment and single hospital rooms
• Benefit limits for alternative practitioners and complementary treatment methods

A downgrade in these areas should only happen after a careful risk assessment.

Risk Assessment and Health Questions When Switching Tariffs

Switching without a Health Assessment

Risk assessment is a central, often misunderstood element of the internal tariff switch. Under German insurance law, the basic rule is: switching to a new tariff with exactly the same or a lower scope of benefits happens entirely without a new health assessment. The insurer may under no circumstances charge new risk loadings for pre-existing conditions that only arose after the original contract was concluded. This is by far the biggest and most important advantage of Section 204 VVG for existing customers. Even severely chronically ill policyholders can effectively lower their monthly premiums this way without fear of reprisal. There is no rejection, and the insurer must accept the application to switch to the weaker or equivalent tariff without delay.

Handling Additional Benefits in the New Tariff

A health assessment only becomes necessary if the new tariff provides explicit additional benefits compared to the old tariff. This could, for example, be significantly higher daily sickness benefit, senior-consultant treatment in hospital, or a drastic reduction in the annual deductible. In these specific cases, the insurer reviews the applicant's current state of health very closely. If the medical assessment finds an elevated risk, the insurer can demand an appropriate risk loading for these specific additional benefits. Alternatively, a benefit exclusion can be agreed for the additional benefits. Basic cover remains untouched, but the policyholder must be aware that the desired improvements in cover may come with additional costs or restrictions.

Strategies for Avoiding Loadings

There is a proven legal trick in practice for elegantly avoiding the health assessment on additional benefits. The policyholder can explicitly agree a so-called benefit exclusion for the additional benefits of the new tariff in the contract. This caps and limits the new tariff exactly to the benefit level of the old tariff. The insurer must then accept the switch without a health assessment and without a risk loading. However, this method requires deep tariff expertise and experience. Independent insurance brokers can serve as competent points of contact for tariff-switch advice [2]. They know the pitfalls and phrase the relevant applications in a way that is legally sound, so the insurer has no grounds for unjustified risk loadings or rejections.

Alternatives to the Internal Tariff Switch

The PKV Standard Tariff

Alternatives to a regular internal tariff switch primarily include the standard tariff and the basic tariff of private health insurance. These strictly regulated statutory social tariffs offer basic insurance cover roughly matching the level of statutory health insurance (GKV). The standard tariff is open exclusively to policyholders who joined the PKV before January 1, 2009, and who have reached certain age thresholds. The monthly premium under the standard tariff is capped by law at the maximum contribution of the GKV, which can bring substantial financial relief. It provides solid basic care but categorically excludes many comfort benefits such as senior-consultant treatment or a single room, which is often a considerable adjustment for long-standing private patients.

The Basic Tariff as a Safety Net

The basic tariff, by contrast, is accessible to all privately insured people, completely regardless of their original date of entry into the PKV. Here too, the maximum premium is capped at the GKV's maximum contribution and offers protection against financial overload. However, doctors' fees are strictly limited under the basic tariff, which in practice often makes finding a doctor considerably harder, since many physicians reject these rates. This is a problem. Privately insured people always have the legal right to switch to other comparable tariffs at their insurer [3]. Switching to social tariffs should therefore always only be the absolute last resort. A regular tariff switch is usually better, since it preserves genuine private-patient status and offers considerably more flexibility in choosing doctors and hospitals.

Premium-Relief Tariffs in Old Age

Another strategic alternative is arranging a so-called premium-relief tariff (Beitragsentlastungstarif) early on. Here, the policyholder pays an additional premium surcharge to the company during their younger, higher-earning years. This capital accumulates with interest and serves solely to permanently lower the PKV premium from a certain age, usually 65. The big advantage is the tax deductibility of the ongoing payments as provision expenses. The main drawback is the lack of flexibility, since the accumulated capital is often forfeited entirely when switching provider. A precise profitability calculation is essential to ensure that the return on the relief tariff is genuinely attractive and economically sensible compared to alternative forms of investment on the capital market.

Both tariffs serve as a last resort in case of financial overload and should not be the first choice for optimizing premiums.

The Process of Switching Tariffs in Practice

Requesting Switch Offers

The tariff-switch process begins with formally requesting concrete switch offers from the current insurer. The policyholder or their appointed broker asks the insurer in writing to calculate all eligible tariffs under Section 204 VVG in detail. The insurer must comply within a statutory deadline of 15 working days. The offers provided must precisely disclose and credit the customer's individual age-related reserves. Insurers often initially send only standardized token offers that don't tap the portfolio's full savings potential. Persistence pays off, and it is often necessary to specifically request particular tariff combinations to get the genuinely lucrative options on the table for the customer.

Detailed Comparison of Conditions

Once the offers are received, a detailed, meticulous comparison of the insurance conditions follows. Here, experts compare and assess the old and new tariffs clause by clause. Particular attention goes to often-hidden benefit restrictions, for example on medical aids and remedies, outpatient psychotherapy, or medical transport costs. A tabular comparison helps enormously in keeping track of the complex sets of rules. Only once all differences in benefits are unsparingly transparent can a truly well-founded decision for or against a switch be made. The devil is in the detail, and a superficial look at just the monthly premium inevitably leads to nasty surprises with the first larger doctor's bill after the tariff switch has taken effect.

Implementation and Direct Transition

The actual contractual switch takes place through a formal declaration of acceptance by the policyholder to the company. The insurer then issues a new, adjusted insurance policy documenting the changed terms. It is important here that the switch happens without interruption and that no dangerous gaps in cover arise. This is essential. Ongoing, cost-intensive treatments must necessarily be clarified with the insurer beforehand to avoid later reimbursement problems. A professionally supported tariff switch usually takes four to eight weeks from request to policy. It is a structured process that, when carried out correctly, brings immediate and lasting financial relief for the policyholder without jeopardizing the medical safety net.

Representing Your Interests and Market Analysis

In this complex tariff optimization, nextsure acts as an analytical filter. As an officially licensed broker under Section 34d of the German Trade Regulation Act (GewO), nextsure legally represents solely the interests of the customer, not those of the respective insurance company. The PKV tariff landscape now comprises thousands of historical and current tariff combinations that are completely impenetrable to laypeople. nextsure uses state-of-the-art digital analysis tools to scan the respective insurer's entire tariff portfolio in depth. This reliably identifies hidden tariffs that aren't actively advertised. This maximizes the savings and ensures the customer isn't fobbed off with second-rate standard offers that the insurer prefers out of self-interest.

Negotiating as Equals

A key advantage of professional broker involvement is expert communication with the insurer on an equal footing. In practice, insurance companies often try to steer customers wanting to switch into tariffs that are more profitable for the company. An experienced broker sees through these tactical maneuvers immediately and specifically requests exactly the tariffs that offer the best value for the customer. This pays off. In addition, nextsure handles the entire administrative process, from the first formal request through to the final legal review of the new insurance policy. This saves time and nerves, since the customer doesn't have to deal with hold queues, incomprehensible forms, and stalling responses from case handlers.

Free Expertise for End Customers

Advice and tariff switching through nextsure remain free of charge for end customers. As is standard in the industry, the broker is paid via the existing commission agreement directly with the insurer. There are absolutely no hidden fees for the customer, as is often the case with commercial tariff-switch advisors, some of whom charge up to twelve months' worth of savings as a success fee. With nextsure, policyholders get a transparent, data-driven, and fair optimization of their private health insurance. The focus is on long-term affordability. This is genuine customer focus, putting the policyholder at the center and creating lasting financial breathing room for the future.