Tax return: Which insurances are deductible and how you can benefit
27 Apr 2025
4
Minutes
Katrin Straub
CEO at nextsure
Many people are unaware that numerous insurance premiums can reduce the tax burden. Find out here which insurance policies you can claim on your tax return and how to proceed in order to save real money. This article outlines the most important deductible policies and their corresponding maximum amounts.
The topic in brief and concise terms
Contributions to basic health and nursing care insurance are generally fully deductible and take precedence over other miscellaneous provisions.
Professional-related insurances (e.g., professional liability) can be claimed indefinitely as business expenses or operating costs.
For other precautionary expenses (e.g., private liability, accident insurance), maximum amounts apply (€1,900 for employees, €2,800 for self-employed), which are often already reached by health and care contributions.
Overview: These insurance categories are relevant for tax purposes
Essentially, deductible insurances can be divided into three main categories: precautionary expenses, advertising expenses, and retirement expenses. Each category has its own rules and maximum limits which need to be considered. Correct classification is crucial for maximizing tax savings.
The most important facts at a glance
Before we delve deeper into the details, here are the key points on the deductibility of insurances:
Contributions to basic health and nursing care insurance are often fully deductible.
Liability insurances (private, motor, pet owner) are considered other precautionary expenses.
Occupational insurances such as professional liability or labour law protection can be claimed as advertising expenses.
For other precautionary expenses, maximum limits apply: one thousand nine hundred euros for employees and two thousand eight hundred euros for self-employed individuals.
Retirement expenses (e.g. Rürup-Pension) are deductible up to an annual maximum amount, which is twenty-seven thousand five hundred and sixty-five euros for 2024.
This distinction helps you better assess the potential of your insurance expenditures. Below, we explore the individual areas in more detail.
Deducting healthcare and insurance expenses for tax purposes
Prevention expenses include all insurances that serve your personal protection and health care. This particularly includes contributions to health and nursing care insurance. You can generally fully deduct the basic coverage of your statutory or private health insurance as well as statutory nursing care insurance. This also applies to contributions for insured children and spouses. These are entered in the 'Vorsorgeaufwand' form.
Other prevention expenses that are deductible within the maximum amounts of nineteen hundred euros (employees) or twenty-eight hundred euros (self-employed) include:
Private liability insurance
Motor vehicle liability insurance
Pet owner's liability insurance
Accident insurance
Term life insurance
Disability insurance (as a standalone contract)
Unemployment insurance
Supplementary health insurances (e.g., dental insurance) and supplementary nursing insurances, provided the maximum amounts are not already used by basic health and nursing contributions.
It is important to know that contributions to basic health and nursing care insurance often already use up the entire maximum amount for other prevention expenses. Nevertheless, you should specify all relevant insurances. Find out more about where insurances are entered. The next category concerns occupationally motivated insurances.
Advertising costs: Deduct professional insurance without limit
Insurances that have a clear professional relevance can be claimed as advertising expenses (for employees) or operational expenses (for self-employed individuals). The great advantage: There is no upper limit for advertising expenses like there is for pension expenses. Every euro that exceeds the employee lump sum of one thousand two hundred thirty euros (as of 2024) has a tax-reducing effect.
Typical insurances that can be deducted for professional purposes include:
Professional liability insurance: Essential for many professions such as doctors or architects.
Employment legal expenses insurance: Costs for the professional share can be deducted.
Occupational accident insurance: Contributions for purely occupational accident insurance are fully deductible; often fifty percent for mixed policies.
Account management fees for a pure salary account can also be proportionately applied.
Even an accident insurance can be tax-deductible if it covers occupational risks. For mixed insurances that cover both private and professional risks (e.g., a legal expenses insurance with employment protection), the professional share must be certified by the insurance and shown separately. Next, we examine the tax treatment of retirement planning products.
Retirement provisions: Prepare for the future and save on taxes today
Contributions to certain pension contracts can also be claimed for tax purposes and fall under the category of retirement expenses. This particularly includes contributions to the state pension scheme and so-called basic pension contracts (Rürup pension). For the year 2024, one hundred per cent of these contributions up to a maximum amount of twenty-seven thousand five hundred sixty-five euros for singles (fifty-four thousand one hundred thirty euros for married couples) can be deducted as special expenses. For employees, the tax-free employer's contribution to the pension scheme is deducted from this maximum amount.
A special case is the Riester pension. Contributions to this are entered in Annex AV. The tax office automatically checks (favourability check) whether the special expenses deduction or the state allowances are more advantageous. The maximum deduction for special expenses for Riester contracts is two thousand one hundred euros. Even a unit-linked pension insurance can sometimes offer tax advantages. Contributions to occupational pension schemes (bAV) financed through salary conversion are already exempt from tax by the employer and do not need to be separately stated in the tax return. Now to the insurances that generally cannot be deducted.
Non-deductible insurance: These policies are excluded
Not all insurance policies can be deducted from your taxes. Generally, pure property insurance or policies without a direct pension or professional character are usually not tax-relevant. These include, for example:
Household insurance (exception: partially for a workspace used for professional purposes).
Private comprehensive car insurance (the car liability insurance, on the other hand, is deductible as a precautionary expense).
Pure travel luggage or cancellation insurance.
Pet health insurance (exception: guide dogs or therapy dogs).
Mobile phone or electronics insurance.
Capital life insurance policies taken out after January 1, 2005 (old contracts prior to 2005 may still be deductible under certain circumstances).
It's important to carefully check which of your insurances meet the criteria for tax deductibility. A hearing aid insurance could possibly be considered an extraordinary expense. In the next section, we provide expert tips for optimal planning.
Expert Depth: Sections, Judgments and Design Tips for Maximum Savings
For tax-optimised use of your insurance expenses, detailed knowledge is beneficial. The relevant regulations can be found in the Income Tax Act (EStG), particularly § 10 EStG for special expenses. The Citizens’ Relief Act has fundamentally improved the deductibility of health and long-term care insurance contributions. Our expert tip: Carefully keep all insurance certificates and contribution invoices, even if the tax office does not always request them immediately. Proof may be required upon request.
For occupational disability insurance (BU), the tax treatment is complex. Contributions to an independent BU (SBU) can be deducted as other pension expenses within the maximum limits. However, these maximum limits are often already exhausted by health and long-term care insurance contributions. A private BU pension is taxed in the event of a claim only on the earnings component. A fiscally more attractive option can be the combination of an occupational disability supplementary insurance (BUZ) with a basic pension (Rürup pension). Here, the total contributions (Rürup + BUZ) can be claimed as retirement provision expenses up to the higher maximum rates, provided that the BUZ share does not exceed forty-nine percent of the total contribution. More information about the direct insurance can also be found with us. Also, consider the international health insurance, which is often deductible.
Also take into account current judgments of the Federal Fiscal Court (BFH), which can, for example, concern the distribution of mixed insurance contracts. Professional advice can be useful here to make full use of all options. nextsure provides you with a comprehensive analysis of your insurance situation.
Practical examples and calculations: How deductible insurance affects you
To make the theory more tangible, let's consider some examples. Suppose an employee has annual contributions of four thousand euros to basic health and nursing care insurance. This means the maximum amount for other pension expenses of one thousand nine hundred euros is already significantly exceeded. Other policies such as private liability insurance (one hundred euros) or accident insurance (two hundred euros) no longer have a tax-reducing effect, but should still be reported.
A self-employed person pays six thousand euros annually for their basic health and nursing care insurance. Their maximum amount is two thousand eight hundred euros. Here too, other pension expenses are generally no longer deductible. However, if they have professional liability insurance for three hundred euros, they can fully deduct this as a business expense. If they additionally pay five thousand euros into a Rürup pension, these are deductible as retirement provision expenses. The correct allocation and maximising of the respective maximum amounts are crucial. Accurately reporting private liability in the tax is a first step. The precise calculation of your tax savings depends on your individual marginal tax rate. With our digital portal, we help you stay on top of things.
Your path to the optimal tax return with nextsure
More useful links
Das Bundesfinanzministerium provides information from the Income Tax Handbook that is relevant for income tax.
The Deutsche Rentenversicherung offers a brochure with information on tax law for insured persons and pensioners.
Ihre Vorsorge explains how Riester contributions can be deducted for tax purposes.
The Finanzamt.NRW provides information on the tax treatment of contributions to health and long-term care insurance.
Wikipedia offers a comprehensive article on special expenses in German tax law.
FAQ
Can I deduct my household insurance from tax?
Usually, contents insurance is not tax-deductible as it falls under property insurance. An exception exists if you have a home office recognized for tax purposes; in that case, the proportional premium for the area of the home office can be claimed as business expenses or operating costs.
Are contributions to term life insurance tax-deductible?
Yes, contributions to a term life insurance can be claimed for tax purposes as other provident expenses within the applicable limits (€1,900 for employees, €2,800 for self-employed individuals).
How are contributions to disability insurance treated for tax purposes?
Contributions to an independent occupational disability insurance (SBU) are tax-deductible as other pension expenses, provided the maximum amounts have not already been exhausted by health and long-term care insurance contributions. Combining it with a Rürup pension (basic pension with disability insurance) can be more advantageous for tax purposes, as higher deduction amounts for retirement provisions apply here.
What evidence does the tax office require for deducted insurances?
Normally, you do not need to submit the receipts directly with the tax return (record retention requirement). However, the tax office may request evidence such as contribution certificates from insurance companies or payment receipts (e.g. bank statements). It is advisable to keep these documents for at least the duration of the appeal period.
What is the difference between deductible costs and income-related expenses when it comes to insurance?
Vorsorgeaufwendungen are for private protection (e.g., health, care, liability insurance) and can only be deducted up to certain maximum amounts. Business expenses are job-related expenditures (e.g., professional liability, employment legal protection insurance) and can generally be deducted in full without limitation, provided they exceed the employee allowance.
Can contributions for supplementary dental insurance be deducted?
Yes, contributions to a supplementary dental insurance can be claimed as other precautionary expenses in the tax declaration. However, this only applies if the maximum amount for other precautionary expenses (€1,900 for employees or €2,800 for self-employed individuals) has not already been exhausted by the contributions to basic health and nursing care insurance.
