Private pension and compulsory health insurance: How to secure your income in retirement
20.05.25
11
Minutes
Katrin Straub
Managing Director at nextsure
The joy of retirement can be clouded by unexpected health insurance contributions on private pensions. Many retirees are unsure which sources of income are subject to contributions and which are not. This article provides clarity and shows you ways to ease the financial burden.
The topic in brief and concise terms
Retirees covered by compulsory health insurance (KVdR) generally do not pay health insurance contributions on purely private pensions, whereas voluntarily insured persons do.
For occupational pensions, there is an allowance for pensioners with compulsory insurance (2025: EUR 187.25), which does not apply to voluntarily insured people.
Retirees with private health insurance pay contributions that are not based on income and may receive a subsidy from the pension insurance scheme.
Health insurance contributions on private pensions: Understanding the basics
Many people approaching retirement wonder whether their private pension is subject to compulsory health insurance and therefore incurs contributions. The answer is not a blanket one; it depends crucially on your status in health insurance. As a general rule: pensioners who are compulsorily insured under the health insurance scheme for pensioners (KVdR) usually do not pay health insurance contributions on purely private pensions, such as those from a privately arranged pension insurance policy. This also applies to other private income, such as rental income or investment income, received in addition to the statutory pension. The position is different for pensioners who are voluntarily insured in the statutory health insurance scheme; here, almost all types of income are taken into account when calculating contributions. For those insured with private health insurance, by contrast, income has no bearing on the amount of their private health insurance contributions. Correctly assessing your situation is the first step towards financial security in retirement.
Compulsory insurance vs voluntary insurance: A crucial difference for your contributions
The status of a pensioner subject to compulsory insurance in the KVdR is often the key to exemption from contributions for purely private pensions. To obtain this status, you must meet the so-called 9/10 rule: in the second half of your working life, you must have been covered by statutory health insurance for at least nine-tenths of the time. This may have been through compulsory membership, voluntary membership or family insurance. Those who meet this requirement are generally automatically compulsorily insured as pensioners and benefit from the fact that no health and long-term care insurance contributions are payable on private capital income or private pension insurance policies. Many pensioners overlook the fact that periods of family insurance are fully credited here. By contrast, pensioners voluntarily insured under statutory health insurance must pay contributions on most of their income, including private pensions. The general contribution rate for this is fourteen point six per cent plus the insurer-specific additional contribution. A precise review of your insurance history is therefore essential in order to avoid later surprises with health insurance contributions as a pensioner.
Occupational pensions and retirement benefits: where allowances apply
On top of purely private pensions, income from occupational pension schemes (bAV) or other pension benefits often also plays a role. In this case, the situation regarding compulsory health insurance contributions is more complex. For pensioners covered by compulsory health insurance, an allowance for bAV benefits has applied since 1 January 2020. In 2025, this allowance amounts to EUR 187.25 per month. This means that health insurance contributions are only payable on the part of the company pension that exceeds this allowance. For one-off capital payments from a bAV scheme, the sum is spread over ten years (1/120 per month) to determine the monthly charge. Important: This allowance does not apply to pensioners voluntarily insured under statutory health insurance. For them, these income types are generally fully subject to contributions. Other pension benefits, such as civil service pensions, are often subject to a threshold; if this is exceeded, the entire amount is subject to contributions. A careful review of the respective type of income is decisive here.
Understanding contribution calculation: How your contributions are made up
The amount of health insurance contributions for pensioners who receive contributory income in addition to their state pension depends on various factors. For pensioners compulsorily insured under the KVdR, the general contribution rate of currently fourteen point six per cent is levied on the state pension, with the pension insurance scheme covering half, i.e. seven point three per cent. In addition, there is the insurer-specific supplementary contribution, of which the pension insurance scheme also bears half. Pensioners under KVdR pay the full general contribution rate plus the full supplementary contribution themselves on contributory pension benefits (e.g. occupational pensions above the allowance) and earned income from self-employment. For voluntarily insured persons, the calculation is more comprehensive: all income needed for subsistence is taken into account here, including, in addition to the pension and pension benefits, rental income or indeed returns from a private pension insurance policy. The contribution rate for this income is often the reduced rate of fourteen point zero per cent plus the full supplementary contribution. You should clarify the exact composition of your contributory income with your health insurance provider. Pensioners usually bear long-term care insurance contributions alone; the rate is currently three point six per cent (as at 2025, with an additional surcharge for childless people if applicable).
The following types of income may be relevant for voluntarily insured persons:
Statutory pensions
Occupational pensions and other pension benefits
Income from self-employment
Investment income (e.g. interest, dividends)
Income from renting and leasing
Private pensions (e.g. from private pension insurance policies, Riester pensions)
The complexity of the contribution calculation underlines the need for an individual assessment.
Special case for privately insured patients: No income-dependent contributions
For retirees who have private health insurance, the question of contributions to a private pension is handled differently. Contributions to private health insurance (PKV) are calculated independently of income. This means that additional income in old age, whether from a private pension plan, capital gains or rental income, does not lead to an increase in the PKV contribution. The insurance cover agreed once and the associated tariff features determine the level of the contribution. However, privately insured retirees who receive a statutory pension can apply for a subsidy from the pension insurance scheme towards their PKV contributions. This subsidy is based on the amount that the pension insurance scheme would spend for a retiree insured under the statutory scheme (currently seven point three per cent of the gross pension plus half of the average supplementary contribution). However, the subsidy is capped at a maximum of half of the actual insurance premium. Daily sickness allowance insurance usually ends when an old-age pension is drawn. The stability of contributions in old age is a frequently cited advantage of private health insurance in retirement.
Expert tips for optimising your contribution situation
To minimise the burden of health insurance contributions in old age, early and careful planning is essential. Even when choosing retirement provision products, the later impact on health insurance obligations should be taken into account. Our expert tip: check your expected insurance status in retirement (compulsorily insured under KVdR or voluntarily insured) and adjust your pension planning strategy accordingly. For people who are likely to be compulsorily insured under the KVdR, purely private pension insurance policies are often more advantageous in terms of health insurance contributions than certain forms of occupational pension provision, if these significantly exceed the allowance. When a payout from a life insurance policy or pension insurance is due, the choice between a lump-sum payment and annuity payments can also have contribution-related consequences, especially for voluntarily insured persons. Always have your contribution notices in retirement checked carefully, especially when income from different sources comes together. It does happen that allowances are not taken into account correctly or income is classified incorrectly. A review can save you real money. If you are unsure, professional advice such as that offered by nextsure can provide clarity and show individual solutions. Remember that even the private disability pension can count as income for the health insurer.
Important aspects of contribution optimisation are:
Early review of the expected health insurance status in retirement.
Careful selection of retirement provision products with contribution liability in mind.
Detailed analysis of the pros and cons of annuity versus lump-sum payment.
Careful checking of all health insurance contribution notices.
Use of allowances and exemption thresholds wherever possible.
Where applicable, review of tariff change options in private health insurance.
Forward planning helps reduce the financial burden in later life.
The legal framework for the statutory health insurance obligation for pensioners is found primarily in Book Five of the Social Code (SGB V). For compulsory insurance in the KVdR, Section 5(1) no. 11 SGB V is central, as it defines the 9/10 rule for the prior insurance period. The contribution obligation for pension benefits, which also includes occupational pensions, is regulated in Section 229 SGB V, while Section 226(2) SGB V sets the allowance for occupational pensions for pensioners covered by compulsory insurance. It is important to know that statutory rules can change, as shown by the introduction of the allowance for occupational pensions in 2020. Our expert tip: Stay regularly informed about possible changes in the law, which could affect your contribution situation. Case law can also clarify existing rules. For example, the Federal Constitutional Court ruled that privately financed portions of direct insurance policies after leaving employment may not be subject to contributions for KVdR pensioners, provided the pensioner was listed as the policyholder. This illustrates how dynamic this area of law can be and how important up-to-date information is, for example on the question of whether a reduced earning capacity pension and a private occupational disability pension are subject to compulsory health insurance. The complexity often requires a careful assessment on a case-by-case basis.
Your path to the right cover: get advice
The issue of compulsory health insurance contributions for private pensions is complex and depends on numerous individual factors. There is rarely a blanket answer, and the financial impact can be considerable. To ensure that you are not caught out in retirement by unexpected contribution demands and that your retirement provision is optimally structured, we recommend an individual analysis of your situation. Professional advice can help you avoid pitfalls and make the most of all opportunities to optimise contributions. At nextsure, we see ourselves as your partner for tailored and easy-to-understand insurance solutions. We help you gain clarity about your contribution liability and shape your financial future in later life without worry. Use our expertise to request your individual risk analysis. We will review your insurance situation free of charge and provide you with specific suggestions for optimisation, so that you can enjoy your retirement with peace of mind. This also applies to specific products such as the Riester pension in relation to health insurance contributions.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific suggestions for optimisation.
More useful links
The Deutsche Rentenversicherung provides comprehensive information on the options for retirement provision in Germany.
The Deutsche Rentenversicherung provides detailed information on health and long-term care insurance for pensioners in Germany.
The Bundesfinanzministerium provides the final report of the focus group on private retirement provision as a PDF.
The Verband der Privaten Krankenversicherung (PKV) provides information on private health insurance for pensioners in Germany.
The Verbraucherzentrale provides consumer advice on private pension insurance as a retirement provision option.
Destatis (Statistisches Bundesamt) publishes a press release on the income and financial situation of older people in 2023.
The Bundesministerium für Arbeit und Soziales (BMAS) provides information on retirement income and additional retirement provision.
FAQ
Which income is subject to contributions for pensioners who are voluntarily insured?
For retirees insured under the statutory health insurance scheme on a voluntary basis, all income is generally taken into account for the calculation of contributions. This includes the state pension, occupational pension benefits (e.g. company pensions), earnings from self-employment, investment income, rental and leasing income, as well as private pensions (e.g. from private pension insurance policies or Riester contracts).
Does a private pension affect my private health insurance?
No, contributions to private health insurance (PKV) are not dependent on income. Receiving a private pension therefore does not lead to an increase in your PKV contributions.
What happens if I do not meet the requirements for the KVdR?
If you do not meet the prior insurance periods for KVdR, you can generally take out voluntary membership in statutory health insurance. Alternatively, there is the option of private health insurance, if you do not already have it. With voluntary statutory insurance, a broader range of income is then subject to contributions.
Does the allowance for occupational pensions also apply to long-term care insurance?
No, the allowance for occupational pensions (currently EUR 187.25 for 2025) applies only to health insurance contributions. In long-term care insurance, there is an exemption threshold for pension-type benefits (not an allowance). If this is exceeded, the full amount is subject to long-term care insurance contributions.
Can I switch back from private to statutory health insurance as a pensioner?
A switch from private health insurance (PKV) back to statutory health insurance (GKV) is only possible for retirees in very limited exceptional cases, for example if the requirements for family insurance were met or, under certain conditions, if income falls significantly below the compulsory insurance threshold before retirement. In general, a switch after retirement is excluded.
Are foreign pensions also taken into account for health insurance contributions?
Yes, for pensioners compulsorily insured under the KVdR, comparable pensions from abroad are also subject to health insurance contributions. For voluntary members, foreign income is in any case taken into account as part of total income.
