Private health insurance in retirement: optimise costs, secure benefits
17.06.25
8
Minutes
Katrin Straub
Managing Director at nextsure
Retirement is approaching and you’re wondering what happens next with your private health insurance? Many people fear rising premiums, but with the right planning you can remain fully covered in later life too. Find out what options you have and how to shape your private health insurance for retirement in the best possible way.
The topic in brief and concise terms
Retirees can, on application, receive a subsidy from the pension insurance provider towards private health insurance, which reduces the contribution burden.
Thanks to age-related reserves and the removal of certain premium components (e.g. sickness benefit, statutory surcharge), private health insurance premiums can remain stable or even decrease in later life.
An internal tariff change under Section 204 VVG or the conclusion of a contribution relief tariff are effective means of actively reducing contributions in retirement.
Understanding and managing private health insurance premium developments in retirement
Many policyholders are concerned about the cost of their private health insurance in retirement. In principle, certain premium components no longer apply when you retire, which can initially provide some relief. For example, the premium for daily sickness allowance no longer applies, as you are no longer in gainful employment. The statutory surcharge of ten per cent, which is levied until the age of 60 to build up ageing reserves, also no longer applies.
These ageing reserves, which you have accumulated over the years, help to keep premiums stable in old age. Private health insurance calculates premiums so that they remain affordable throughout the entire term, including in old age. Nevertheless, general increases in healthcare costs can lead to premium adjustments. It is a common misconception that private health insurance becomes unaffordable in old age; often, premium increases in the statutory health insurance system have even been higher in percentage terms. An overview of PKV costs helps you get your bearings. The exact development depends on your individual tariff and the reserves you have accumulated.
Making the most of private health insurance subsidies for pensioners
As a pensioner with private health insurance, you are entitled to a subsidy from your pension insurance provider. This subsidy must be applied for proactively, preferably together with your pension application. The amount of the subsidy is based on the standard contribution rate of statutory health insurance (currently 14.6 per cent) and the average additional contribution (currently 1.7 per cent), calculated on the basis of your statutory pension. The pension insurance covers half of this, so at present 8.15 per cent of your pension benefits (as of June 2024).
It is important that the subsidy is capped at a maximum of half of your actual private health insurance premium. For a pension of, for example, 1,500 euros, you could therefore receive a subsidy of up to 122.25 euros per month. This subsidy is an important building block in making private health insurance affordable in retirement. Find out early about the tax deductibility of your contributions. You can obtain the exact calculation and the necessary forms from your pension insurance provider.
Actively reducing contributions: strategies for retirement
There are several ways to actively influence and reduce your PKV contributions in retirement. Early planning is often crucial to success. You can start making provision during your working life.
Here are four effective measures:
Changing tariff within the insurer: Under Section 204 of the Insurance Contract Act (VVG), you have the right at any time to switch to another tariff with your insurer that offers equivalent cover. Often, there are newer tariffs with lower premiums and comparable benefits. Your accumulated ageing reserves remain fully intact.
Contribution-reduction tariffs: Many insurers offer special tariffs designed to reduce contributions in old age. During your working years, you pay an additional savings contribution, which then reduces your regular PKV contributions in retirement. Such a tariff can lower your monthly burden by several hundred euros.
Adjusting the excess: Increasing the excess can noticeably reduce your monthly contribution. Consider whether you can bear higher one-off costs in the event of illness in order to save on an ongoing basis. Adjusting the excess by 250 euros can often already save 50 euros per month.
Adjusting benefits: Review your insurance cover critically. Do you really still need all the additional benefits you have chosen in full during retirement? Sometimes adjustments can be made here that have a positive effect on the contribution without jeopardising the core cover.
These options help you manage the health insurance obligation in old age financially. Individual advice can show you which strategy is best suited to your situation.
Expert knowledge: legal framework and pitfalls
Private health insurance in retirement is subject to specific statutory regulations. One key point is that premiums are independent of income in later life, unlike in statutory health insurance (GKV). This means that additional income from investments or rental properties does not affect your private health insurance premium. Please note that switching back to statutory health insurance for retirees over 55 is only possible in very rare exceptional cases. Careful planning of private health insurance funding in later life is therefore essential.
Our expert tip: check carefully whether a tariff change under Section 204 of the Insurance Contract Act (VVG) is an option. This section guarantees your right to switch to another tariff with the same insurer and equivalent insurance cover, with your ageing reserves fully taken into account. This can often lead to premium savings of up to 30 per cent, without you having to forgo important benefits. Also pay attention to the conditions of so-called standard or basic tariffs, which offer a legally defined minimum level of cover and have capped premiums. These can be an option if the premiums in your current tariff become too high. A calculation of your private pension can provide additional planning security.
Long-term planning: The importance of ageing provisions
Age-related reserves are the cornerstone of premium calculation in private health insurance for retirement. From the start of your contract, part of your premium is set aside and earns interest to cushion the healthcare costs that rise with age. Up to the age of 60, you also pay a statutory surcharge of ten per cent, which likewise flows into these reserves. From the age of 65, these accumulated funds are then used to help mitigate or prevent premium increases. The earlier you join private health insurance, the more time you have to build up a solid buffer of age-related reserves.
The amount of age-related reserves built up can, for a 65-year-old who joined at 35, quite easily reach a five-figure sum. This amount then acts as a buffer against rising healthcare expenditure. It is important to understand that premium adjustments in private health insurance are caused not primarily by you getting older individually, but by medical progress and the general trend in healthcare costs. A solid base of age-related reserves is therefore your best protection for stable premiums in retirement. See also the three pillars of retirement provision.
Action recommendations for a worry-free future
To prepare your private health insurance optimally for retirement, you should act proactively. A thorough analysis of your current situation is the first step. Use the remaining time until retirement to make any necessary adjustments.
Concrete steps for you:
Review your existing contract: Analyse your current private health insurance tariff in terms of benefits and premium level. Does it still meet your needs in later life?
Seek advice: Speak with an independent insurance expert about your options. A professional assessment can help you make the right decisions.
Apply for the subsidy: Remember to apply for the health insurance subsidy from your pension insurance provider in good time. This can reduce your monthly burden by up to 8.15 per cent of your pension.
Check premium relief tariffs: If you have not done so already and it still makes sense in terms of timing, consider taking out a premium relief tariff. Even a monthly savings amount of 100 euros can mean a reduction of 200 euros or more in later life.
Evaluate tariff change options: Ask your insurer about cheaper tariffs with comparable cover (internal tariff change under Section 204 VVG).
These measures can help ensure that your private health insurance remains affordable in retirement and that you continue to enjoy the high-quality health protection you are used to. Also consider the general context of health insurance for pensioners. Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive concrete suggestions for optimisation.
More useful links
Federal Ministry of Health provides comprehensive information on private health insurance in Germany.
Federal Statistical Office (Destatis) publishes press releases with relevant statistical data, which may also relate to health insurance.
German Pension Insurance provides detailed information on health and long-term care insurance for pensioners.
Association of Private Health Insurance (PKV) explains the sustainable financing of private health insurance.
Federal Ministry of Health provides a definition of the standard tariff in private health insurance.
Association of Private Health Insurance (PKV) provides statistics and data on private health insurance in its data portal.
Federal Ministry of Labour and Social Affairs provides information on pensions and retirement provision.
FAQ
How do private health insurance premiums change in retirement?
Contributions can be adjusted due to general cost increases in the healthcare sector. However, ageing reserves and the removal of contribution components (e.g. daily sickness benefit, statutory surcharge from age 60) have a stabilising or reducing effect. A blanket statement is difficult, as it depends greatly on the tariff and individual circumstances.
What options do I have for reducing my private health insurance premiums as a pensioner?
You can check whether it is possible to switch tariffs within your insurance company (Section 204 VVG), choose a higher deductible, cancel benefit modules you no longer need or, if taken out early, benefit from a premium relief tariff.
How much is the pension insurance subsidy towards private health insurance for pensioners?
The subsidy currently amounts to 8.15 per cent of your statutory gross pension (as of June 2024). However, it is limited to a maximum of half of your actual PKV contributions and must be applied for.
Does the contribution for sickness daily allowance automatically cease in retirement?
Yes, on retirement and the associated loss of earned income, the need for sickness daily allowance insurance usually ends, and the corresponding premium share no longer applies.
What are ageing reserves and how do they affect my pension contribution?
Ageing reserves are savings portions built up during the term of your policy to offset healthcare costs that typically rise with age. They help keep your contributions stable in retirement.
Is it possible to switch from private health insurance to statutory health insurance in retirement?
For people over 55, switching back to the GKV is only possible under very strict and rarely met conditions. A return is the exception.
