Switching Policyholders: Your Guide with a Template Letter for a Smooth Transition
7 Apr 2025
8
Minutes
Katrin Straub
CEO at nextsure
A change of policyholder may become necessary in many life situations, whether due to marriage, divorce, or the sale of an insured item. This process requires care to maintain uninterrupted insurance coverage. Find out how to proceed here and make use of our template letter for the change.
The topic in brief and concise terms
A change of policyholder always requires the consent of the insurer and both parties involved (the current and the new policyholder).
Use a detailed template letter to convey all necessary information correctly to the insurer and speed up the process.
Clarify in advance whether switching will change premiums or contract conditions, especially for personal rates or the transfer of no-claims discounts.
Quick Overview: Change of Policyholder Briefly
A change of policyholder transfers an existing contract to a new person. This often occurs in real estate or vehicle sales. The insurer's approval is usually required. Both parties, old and new, must agree to the change. An informal application is often sufficient, but a detailed sample letter provides clarity. This step ensures the continuation of coverage under the new policyholder.
Case Studies: When It Makes Sense to Change the Policyholder
In everyday life, there are numerous situations that necessitate a change of the policyholder. A common reason is the sale of an insured item, such as a car or a property. Here, the insurance often transfers to the new owner. Family changes, like a marriage, divorce, or when a child reaches adulthood and, for example, wishes to take over the car insurance, can also require a change. Ensure the new policyholder is aware of all obligations. For supplementary dental insurance, the son might want to take over the contract himself after completing his education. A change can also be relevant in business transfers when policies need to be rewritten for the new owner. It is essential to understand the difference between the policyholder and the insured person. The policyholder is the contracting party with the insurer. The change ensures that the correct person takes on responsibility and payment of premiums. This avoids complications in the event of a claim, which can quickly lead to financial disadvantages of several thousand euros.
The Process: Step-by-Step Guide to Switching
The change of policyholder requires several formal steps. First, the insurer must be informed about the planned change. This usually requires a written application. This application should include the consent of both the previous and the new policyholder. Many insurers provide forms for this purpose or accept an informal application that contains all the necessary information. A template letter for changing the policyholder can be very helpful in this process. You should consider the following points:
Inform your insurer early about the planned change.
Gather all necessary documents, such as contract number and details of both parties.
Carefully complete the application and have it signed by both parties.
Determine whether the premium or conditions will change due to the switch.
Wait for written confirmation from the insurer before considering the change completed.
The consent of the insurer is a crucial point. They may reject the new policyholder under certain circumstances, such as doubts about creditworthiness. A well-documented process with all signatures helps prevent misunderstandings later on.
Legal Basics: What You Need to Know
The Insurance Contracts Act (VVG) forms the legal basis for insurance contracts in Germany. When changing the policyholder, Section 415 of the German Civil Code (BGB) often applies for the assumption of debt, which requires the consent of the creditor, in this case, the insurer. The insurer must agree to the change because they have a legitimate interest in knowing who their contract partner is. Without the insurer's consent, the change is not valid. The rights and obligations from the contract, such as the obligation to pay premiums and the right to benefits, transfer to the new policyholder. It is important that the new policyholder is informed about all contract details, especially about potential no-claims discounts in car insurance. In the case of life insurance, the transfer can be considered a gift and have tax implications. A breach of the duty of disclosure by the original policyholder can also affect the new policyholder. Therefore, transparency between all three parties – the old policyholder, the new policyholder, and the insurer – is essential. A clearly formulated template letter for changing policyholders helps convey all relevant information correctly.
Sample Letter: Template for Requesting a Change of Policyholder
A well-crafted application is essential for a smooth transition of the policyholder. Using a template can help ensure no important information is overlooked. Such a template letter should include at least the following information:
Full names and addresses of the previous and new policyholder.
The insurance policy number concerned.
The date on which the change is to take effect.
A clear statement that all rights and duties are to be transferred.
Signatures of both parties (current and new policyholder).
If applicable, the new bank details for premium collection.
Here is an example of how such a letter could be structured. Please note that this is a general template and may need to be adapted depending on the insurance and situation. Always check your insurer's specific requirements.
[]
[]
[]
[,]
Subject: Application for the Change of Policyholder for Contract No. []
Dear Sir or Madam,
We hereby apply, [,], residing at [], and [,], residing at [], born on [], for the change of policyholder for the above-mentioned insurance contract.
The change is to take effect on [,..äö].
Mr/Ms [] will assume all rights and obligations under the existing insurance contract as of this date. Future premiums should be debited from the following account: [,].
We would like to request written confirmation of the policyholder change, stating the exact effective date.
Yours sincerely,
[] []
This template letter for changing the policyholder serves as a basis. For specific cases, such as a change of owner in home building insurance, additional information may be required.
Expert Tips: Avoid Pitfalls and Secure Benefits
When changing the policyholder, there are some points that require special attention to avoid disadvantages. Our expert tip: Confirm in advance if the insurer agrees to the change and whether any terms will be altered. For car insurance, for example, the transfer of no-claims discounts is an important aspect, which can amount to several hundred euros per year. It is not always possible to directly transfer the discounts to every individual. Make sure to gather detailed information about the conditions, especially when it concerns the situation of different owners and policyholders. For life or pension insurance policies, a change can have tax implications or affect beneficiaries. It is advisable to hand over the original policy and all amendments to the new policyholder. Document the entire process in writing and keep copies of all correspondence. This can be crucial in the event of later discrepancies. A thorough review of the contract conditions by the new policyholder is also recommended to ensure the insurance cover meets their needs. Sometimes, it may be more sensible to cancel an old policy and take out a new, more suitable one, rather than taking on an existing policy with potentially less favourable conditions.
Special cases and their peculiarities
In addition to standard cases, there are situations that require special arrangements when changing the policyholder. One such special case is the death of the policyholder. Generally, the contract is transferred to the heirs, who must then decide whether to continue the contract, terminate it, or transfer it to another person. In the case of a motor insurance policy, the contract is vehicle-specific and does not automatically end with the policyholder's death. Another particular case involves the changeover in an occupational pension scheme when an employee changes employers. Here, the consent of multiple parties is often required, and transfer values need to be assessed. Even in the transfer of a car insurance policy within the family, for example, from father to son, there are specific regulations concerning the no-claims bonus. Our expert tip: Contact your insurer to get information on the exact conditions for your specific case. The notice periods and special cancellation rights can vary depending on the type of insurance and contract. It is always advisable to consult the General Insurance Terms (GIT). In complex situations, a professional consultation can be beneficial to consider all aspects and find the best solution.
Frequently Asked Questions about Changing the Policyholder
More useful links
The Verbraucherzentrale offers consumer tips for saving on car insurance.
The Verbraucherzentrale provides information about the possibility of a quick switch to statutory health insurance.
The Verbraucherzentrale offers detailed information about switching from private to statutory health insurance.
The Verbraucherzentrale NRW gives advice on insurance consultancy and explains what is necessary and advisable.
The Insurance Ombudsman is an independent conciliation body for disputes between policyholders and insurance companies.
The PKV Ombudsman explains the tasks and purpose of its conciliation body for private health insurance.
The Tagesschau provides a news article with information on changing car insurance.
FAQ
How long does a change of policyholder take?
The processing time for a policyholder change may vary, but it is usually a few working days up to two weeks after the insurer receives all complete documents.
Does the premium change when the policyholder is changed?
That depends on the type of insurance and the policy. For personal policies (e.g. car insurance with a no-claims discount), the premium for the new policyholder may change.
What happens if the insurer does not agree to the change?
If the insurer does not agree to the change (e.g., due to the new policyholder's lack of creditworthiness), the contract remains with the previous policyholder or may need to be terminated.
Must the insured person consent to the change of policyholder?
If the insured person is not also the policyholder, their consent to a change of policyholder is generally not required, unless there is an irrevocable right of designation or specific contractual clauses provide otherwise. The policyholder is the contracting party.
Can a change of policyholder be applied retroactively?
A change of policyholder usually cannot be made retroactively. Insurers' forms typically provide for a transfer with immediate effect or at a future date.
What role does the template letter play in changing the policyholder?
A template letter serves as a guideline and helps ensure that all necessary information for the policyholder change request is included, which can facilitate and speed up the process.
