This article was translated from the original human-written German version. While we strive for accuracy, we cannot guarantee it is error-free. We recommend consulting the German original for the most precise information. This content is for informational purposes only and does not constitute financial or legal advice. Always consult with a qualified professional before making insurance or financial decisions.
PKV Tariff Change and Tariff Optimization: Flexibility and Premium Design in Private Health Insurance
Private health insurance (PKV) is designed for long-term coverage. But how flexible is such a contract in reality when individual life circumstances change or premiums are adjusted over the years? Many insured individuals ask themselves whether and how they can adjust their PKV tariff to optimize coverage according to their current needs while keeping an eye on costs. The fear of rising premiums in old age is common, but the PKV system offers various legally anchored mechanisms and options to actively manage premium development.
This article sheds light on the legal basis of the tariff change right, the various optimization options within private health insurance, and strategic approaches for long-term premium stability. We will show which factors influence premium adjustments and how insured individuals can actively adapt their tariff model to their life stages to ensure needs-based and affordable insurance coverage.
Fundamentals: The Principle of Flexibility in Private Health Insurance
Unlike statutory health insurance (GKV), whose benefits and premiums are regulated by the solidarity principle and the pay-as-you-go system, private health insurance is based on the equivalence principle and the funded system. This means that benefits are determined by the contractually agreed scope, and premiums depend on the chosen tariff, age at entry, and health status at the time of contract conclusion. A significant component of this premium calculation is the formation of old-age reserves.
These reserves are intended to cushion the health costs that are predictably rising in old age and to prevent premiums from increasing solely due to the insured person getting older. The entire PKV sector had formed old-age reserves of EUR 328 billion for 8.7 million privately insured individuals in 2023.
A key element that enables flexibility in PKV is the tariff change right, which is regulated in § 204 of the German Insurance Contract Act (VVG). This right allows insured individuals to switch to a different tariff within their insurance company that better suits their current needs and financial situation. This is an important tool not only for adapting insurance coverage to changing life phases – such as family planning, career changes, or retirement – but also for responding to premium adjustments.
In-depth: Strategies for Tariff Changes and Premium Optimization
The possibility of tariff optimization within PKV is diverse. It allows insured individuals to react to changed life circumstances and actively shape premium development.
The Tariff Change Right according to § 204 VVG in Detail
The legally anchored tariff change right is a crucial tool for PKV policyholders. It allows for the adjustment of insurance coverage without having to change the insurance company.
Preservation of Old-Age Reserves: A significant advantage is that the old-age reserves built up over the years are generally retained when switching within the insurance company and are credited to the new tariff.
Switching Without Re-examination of Health: Many insurers offer a variety of switching options without a new health check. This is particularly relevant if the insured person's health has deteriorated over time, as it prevents risk surcharges or benefit exclusions in the new tariff that would otherwise be customary with a new policy.
Adjustment of Deductibles: A common way to reduce premiums is to switch to a tariff with a higher deductible. This reduces the monthly premium payment, but increases the portion that the insured person has to bear themselves in case of a claim.
Adjustment of Benefit Scope: Insured individuals can adjust their scope of benefits. This can mean a reduction in comfort benefits (e.g., from a single room to a double room in the hospital) to lower premiums. Conversely, tariff-guaranteed option rights can also be used to expand insurance coverage in certain life phases.
Mechanisms for Premium Stability and Reduction in Old Age
PKV has specific instruments aimed at stabilizing or even reducing premiums in old age.
The Statutory 10% Surcharge: This surcharge is levied on individuals between the ages of 21 and 60, in addition to the regular gross premium (without risk surcharge). The funds saved serve to offset premium adjustments from the age of 65 onwards. From the age of 60 or 65, this surcharge is waived, which directly eases the premium.
Waiver of Daily Sickness Allowance: Upon retirement, the premium for the daily sickness allowance is usually waived, as no earned income needs to be insured. This leads to a further premium reduction. The daily sickness allowance insurance in PKV can pay out indefinitely as long as medically justified incapacity to work and the need for treatment exist.
Premium Relief Tariffs (BET): Many insurers offer special tariffs that enable early planning for a premium reduction in old age. Premiums for these tariffs are tax-deductible and eligible for employer contributions.
Reserves for Premium Refunds (RfB): The surpluses generated in PKV flow into the reserves for premium refunds and can be used to limit premium increases.
The Basic Tariff: In cases where premiums become too high despite all optimization measures, there is the basic tariff. It guarantees insurance coverage that corresponds to the scope of benefits of the GKV, at a premium that does not exceed the GKV maximum contribution. In cases of proven need, the premium in the basic tariff can even be halved, with the social welfare office covering the other half. In exceptional cases of hardship, the premium can even be reduced to zero.
Handling Premium Adjustments (BAP)
Premium adjustments in PKV are regulated by law and occur when the actual benefit expenses of a tariff deviate from the originally calculated values.
Reasons for BAP: The main reasons for premium adjustments are medical-technical progress, improved treatment methods, more frequent use of medical services, rising hospital costs, and increasing life expectancy. However, the aging of individual policyholders is not a reason for an individual premium increase.
Limitations: Insurers can use procedures to limit premium adjustments by utilizing funds from the reserves for premium refunds.
Old-Age Reserves for BAP: In the event of a premium adjustment, the old-age reserves must also be reassessed. For the original scope of insurance, the original entry age remains decisive. If policyholders simultaneously make a tariff adjustment, the current age is used as the basis for the additional benefits covered by the adjustment.
Tax Aspects of Premium Optimization
Premiums for private health and long-term care insurance can be tax-deductible, which provides an additional financial relief factor.
Unlimited Deductibility of Basic Coverage: Premiums for so-called "basic health insurance" (benefit level corresponding to GKV) and for long-term care insurance are deductible without limits. For many comprehensive insurance tariffs, 80-95% of the premium can be tax-deducted, depending on the scope of benefits.
Reduction by Contributions and Reimbursements: Employer contributions and premium reimbursements reduce the tax-deductible amount.
Families Benefit: Deductibility applies to the taxpayer themselves, their spouse/partner, and for each child for whom there is a claim to child benefit or a tax-free allowance.
Recommendations for Action: How to Change Tariffs and Optimize Your Premiums
Active management of your PKV contract can pay off over the years. However, it requires sound analysis and advice.
Checklist for Tariff Optimization in PKV
Regular Needs Analysis: Review your current insurance coverage and compare it with your current life situation. Have your needs changed (e.g., due to family growth, career change, changed health needs)? The scope of benefits in PKV can be determined by the choice of tariff.
Examine Internal Tariff Options: Inform yourself about all tariffs offered by your insurance company. Many insurers have a wide range of tariffs. Check which tariffs meet your current needs and may offer lower premiums through adjusted benefits or higher deductibles.
Plan for Premium Relief in Old Age: Evaluate the options for actively planning for a premium reduction in old age. Premium relief tariffs are one option whose efficiency you should examine.
Dealing with Premium Adjustments: Understand the reasons for premium adjustments and which internal mechanisms (e.g., limiting premium increases by using reserves for premium refunds (=RfB), waiving the 10% surcharge) contribute to premium stabilization.
Consider Tax Aspects: Inform yourself about the tax deductibility of your health and long-term care insurance premiums to fully utilize potential relief.
Seek Individual Advice: A qualified and independent advisor can analyze your personal situation, present different scenarios, and support you in making the optimal tariff choice. Use tariff comparisons and have the advantages and disadvantages explained in detail.
Frequently Asked Questions (FAQ) about Tariff Optimization
Will I lose my old-age reserves when I change tariffs?
No, if you change tariffs within your insurance company, your old-age reserves will generally be retained. They will be credited to the new tariff. If you change insurance companies, old-age reserves built up before 2009 will be lost. For contracts from 2009 onwards, a transfer value equivalent to the basic tariff can be taken with you.
Are tariff changes only useful when premium adjustments are imminent?
Tariff changes are useful not only for premium adjustments but also when your life situation or individual benefit needs change. Proactive tariff adjustment can help keep coverage needs-based and optimize premiums in the long term.
Can I upgrade my tariff again if needed?
Yes, many insurers offer tariff-guaranteed option rights that allow for later upgrades, often without a new health check or waiting periods. This is particularly important for responding to changing needs (e.g., in the course of family planning or with increasing comfort demands).
What is the basic tariff and when is it an option?
The basic tariff is an option for policyholders whose premiums have become too high. It offers legally guaranteed coverage with benefits equivalent to GKV and a premium that does not exceed the GKV maximum contribution. In cases of need, the premium can even be reduced to zero, or in exceptional hardship cases, even to zero.
Summary
Private health insurance offers its policyholders a high degree of flexibility through the tariff change right according to § 204 VVG to actively shape insurance coverage and react to changing life circumstances.
The key points are:
Flexibility through Tariff Change: Policyholders can change tariffs within their company to adjust benefits and premiums, often without a new health check and with the crediting of old-age reserves.
Long-Term Premium Stability: Mechanisms such as the formation of old-age reserves, the statutory 10% surcharge, and premium relief tariffs are designed to stabilize or reduce premiums in old age.
Active Management: Regularly reviewing the tariff in relation to individual needs and financial situation is essential. Consulting an expert can help find the best strategies for tariff optimization.
Utilize Tax Advantages: The tax deductibility of PKV premiums can offer additional financial relief and should be considered when optimizing premiums.
The need for active tariff optimization in private health insurance will continue to exist in light of demographic change and medical progress. An informed and flexible approach allows policyholders to ensure high-quality coverage tailored to their needs throughout all life stages. The ability to shape one's own insurance coverage remains a key advantage of PKV.