Skip to content
JungIhr Partner

Your life insurance is guaranteed. Two sections of the law say: almost.

In short: as long as your insurer is doing well, you get what the policy says. If it is permanently unable to meet its obligations, the supervisor may, under § 314 of the German Insurance Supervision Act (VAG), temporarily forbid payments, including the payout if you cancel, and reduce benefits. And if the protection fund steps in, guaranteed benefits may be cut by up to 5% under § 222 VAG. Both are German law in force, not a special case from abroad.

Updated on · Michael Jung, Broker specialising in tangible assets

§ 314 VAG word for word

No fixed limit. The yardstick is the insurer's assets.

“Subject to the condition in subsection 1 sentence 1, the supervisory authority may, if necessary, reduce the obligations of a life insurance undertaking under its policies in line with its assets.”
§ 314(2) sentence 1 VAG, our translation

The condition in subsection 1: the insurer is permanently unable to meet its obligations. The supervisor may then temporarily forbid payments, including surrenders and policy loans, and reduce benefits. The law sets no fixed percentage limit. You keep paying your premiums at the previous level during this time. In principle this also applies to unit-linked life insurance, because its investments are part of the insurer's guarantee assets.

Further reading: IKV overview of § 89 and § 314 VAG (PDF, in German) ↗

The guarantee

What exactly is guaranteed?

The guaranteed interest rate applies to the savings portion of your premium, not to the whole premium. Acquisition and administration costs come off first. For new policies this rate stands at 1.0% in 2026. Everything above that is a share of the surplus: a projection, not a promise.

1.0%
Maximum technical interest rate (the “guaranteed interest rate”) for new life insurance policies in 2025 and 2026. It applies only to the savings portion of the premium, not to the whole premium.
80.3 million
life insurance policies in Germany at the end of 2024. In 2015, there were still 86.7 million.
€1,623.3 billion
Investments of German primary insurers as of 30.09.2025

80.3 million policies in Germany. And a protection fund of one per mille.

Each cell is one per mille of all guarantees given by German life insurers. The white cell is the statutory protection fund.

The fund holds one per mille of the industry's net technical provisions and, in an emergency, may call in one further per mille as a special contribution. That is enough for a single insurer. It was never meant for many at once.

Calculator

What would be left of your guarantee?

Move the slider to your guaranteed payout at maturity and choose the case. The figures use the maximum values the law allows.

€120,000

And if it is not the normal case?

The protection fund takes over

€114,000

If the protection fund steps in, guaranteed benefits may be cut by up to 5%. That is the good outcome.

Difference from your guarantee

− €6,000

The amount that could be missing despite the guarantee.

Of €120,000, €114,000 would be left in this case.

How stable is your insurer? Just ask:+49 170 7676706Free of charge, no appointment needed. Consultations in German and English.

A simplified model calculation using the maximum values the law allows. Not a forecast for any particular insurer and not investment advice.

The protection fund

Who steps in when an insurer fails?

For life insurers that is Protektor, the industry's protection scheme. It takes over the book of policies and continues it. That has worked: in 2003 Protektor took over Mannheimer Lebensversicherung, and in 2017 the restructured remainder passed to another provider. To this day it is the only case.

one case
That is how often Protektor, the life insurers' protection fund, has had to step in since it was founded in 2002: in 2003, for Mannheimer Lebensversicherung. In 2017, the remaining policies passed to Entis Lebensversicherung.
1 per mille
That is the size of the life insurers' statutory protection fund: one thousandth of the industry's net technical provisions. In an emergency, it may raise special contributions of at most one further thousandth (§ 226(4) and (5) VAG).

Once, the system held. For many cases at the same time it has never been tested.

One point matters: pension funds are not covered by Protektor. At the Caritas pension fund, company pensions were cut by 10–30%. And where there is no protection fund at all, cover ends entirely: at Element Insurance, around 320,000 policies ran out in 2025.

What you can do

Do not cancel. Look first.

  1. 01

    Read the policy

    Which guaranteed interest rate is in it, which payout at maturity is guaranteed and which is only projected? A projection is not a promise. Only the guaranteed figure counts.

  2. 02

    Check the insurer

    Own-funds ratio, solvency report, run-off yes or no. As a broker licensed under § 34d GewO, Michael Jung works for you, not for a company, and compares the providers.

  3. 03

    Do not hang everything on one policy

    A promise on paper and a tangible asset that belongs to you carry different risks. How much of each suits you is the real question.

How Michael Jung goes about it is set out under Services. The other risks to your wealth are in the asset protection overview.

Common questions

Answered briefly.

Is my life insurance safe?

In the vast majority of cases, yes. But the guarantee comes with two conditions written into the law: if a life insurer is permanently unable to meet its obligations, the supervisor may temporarily forbid payments and reduce benefits under § 314 of the German Insurance Supervision Act (VAG), with no fixed limit. And if the protection fund steps in, guaranteed benefits may be cut by up to 5% under § 222 VAG.

What happens if my insurer becomes insolvent?

The life insurers' statutory protection fund takes over the portfolio and continues the policies. To do so it holds one per mille of the industry's liabilities and can call in one further per mille as a special contribution. Since 2002 that has been needed exactly once: in 2003, for Mannheimer Lebensversicherung.

Should I cancel my life insurance?

Not in a rush. Old policies with high guaranteed interest rates are often worth more than cancelling brings in, and in the early years the surrender value is well below the premiums paid. The sensible first step is a comparison: what guarantee does the policy contain, how stable is the insurer, and are there alternatives to cancelling, such as suspending premiums or selling the policy.

Read on

More about your wealth. Short, with sources.

Michael Jung

Written and reviewed by

Michael Jung

Broker specialising in tangible assets · Insurance broker

  • 1996Certified Insurance Specialist (Geprüfter Versicherungskaufmann, IHK)
  • 2003Certified Finance Specialist (Geprüfter Finanzwirt, bbw)
  • 2005Master Consultant in Finance
  • 2016–17Senior Consultant, precious metals advisor (Edelmetallberater, GG-Akademie Berlin)
  • 2021Certified under DIN 77230, the German standard for financial analysis (DEFINO)
  • 2023Florida Premium Real Estate certification

Insurance broker licensed under § 34d GewO · German register of intermediaries D-5D7P-3694H-28 · Last reviewed on

Free initial consultation

How stable is the insurer you are trusting with your money?

Michael Jung looks at your policies as an independent broker and tells you what is guaranteed and what is not. Free and without obligation.

+49 170 7676706

Step 1 of 3 · Name

How should we address you?

Book a call

Consultations in German and English.