German private health insurance - choosing the best one
Many expats living in Germany choose a German private health insurance over a public health insurance. What is really important when choosing a German private health insurance plan?
Table of contents
Introduction: Why You Should Avoid Insurance Agents
Are you an expat living in Germany with public health insurance (e.g. TK)? Would you rather want to be insured in the German private health insurance system than in the public health insurance system? If so, you probably want to know which important factors will help you to choose the right German private health insurance plan for yourself and who to trust when talking to an “insurance advisor“.
In Germany, there are insurance agents and insurance brokers. When working in the insurance business, companies or advisors have to decide which one of the 2 types they want to be. And that decision has major implications for you as the client and how sure you can be that the insurance advice that you are getting from your agent or broker is objective.
German private health insurance: The difference between insurance agents and brokers
- Insurance agents represent the insurance company they work for and not their clients. Therefore, insurance agents are only obligated to the insurance company they work with. Here you can see the official German registry to see who is only an insurance agent.
- Insurance brokers work with many different insurance companies acting on behalf of their clients. They scan the German insurance market for the best insurance available. Here you can see PerFinEx’s official registry entry as proof that we are an independent broker.
That explains the “coincidence” why everyone who talks to insurance agents will always get the exact same result. Even though there are +30 German private health insurance companies in Germany to consider. Insurance agents have a clear conflict of interest when giving advice.
So let us see what you should focus on in this article when choosing the right German private health insurance plan for you – just like an independent broker would. German private health insurance is one of the most personal insurance there is. So there are 3 factors (deductible, coverage, cashback) that you should consider in order to find the best private health insurance in Germany for yourself.
#1 When choosing private health insurance in Germany: Deductible
If you would like to select the right German private health insurance plan for you, here’s how you do it. First, select the amount of deductible you want. A deductible is the co-payment that determines how much medical bills you have to pay yourself. This is before your German private health insurance company starts paying.
Deductibles are usually in Euros per year (e.g. 300€, 600€, or 900€). This means that you would have to pay that amount every year yourself. Medical costs that exceed that amount will be paid by your German private health insurance. Deductibles can also be in percentages, meaning you have to pay e.g. 10% of medical bills yourself up to a certain amount per year (e.g. 500€).
When choosing a deductible, you are basically splitting the risk of costs for treatment or medication with your German private health insurance company. That is why they will reward you with a lower monthly premium compared to a plan with a 0€ deductible.
But keep in mind that a deductible is worth it only for healthy people that will probably not reach their deductible threshold. If you choose a high deductible that you will use up anyway, you might be better off choosing German private health insurance without a deductible in the first place.
Should you go for a high deductible (+1.000€ / year) because it will decrease your monthly premium? No, not as an employee. Your health insurance premium (public or private) is paid 50/50 together with your employer. So you might want to go for a low or even a 0€ deductible because the deductible has to be paid by you in full.
Self-employed people or business owners who do not have a regular employer and therefore have to pay their entire health insurance premium on their own may choose a high deductible in order to save in monthly contributions. When deciding on German private health insurance, keep in mind that self-employed people who do not pay into German social security can have a much higher deductible than employed people.
#2 When choosing Private Health Insurance In Germany: Coverage
The second major deciding factor regarding what is the best private health insurance in Germany after deductible is the coverage. It should be the only reason why anyone would opt for a German private health insurance. After looking at the coverage you can decide if you are willing to pay for that particular coverage. Please do not switch to the private health insurance simply because it is cheaper.
If you compare German public health insurance vs German private health insurance only for the money and not because of coverage, you will most likely select the cheapest German private health insurance plan there is. The cheaper the private health insurance plan, the lower the quality, and the more the monthly premiums will rise over the years.
If you are young and your plan is to leave Germany within the next few years again, you can opt for a cheap plan with low quality that will raise premiums fast and high. Everybody else who plans to be in Germany for decades or even for the rest of his life should opt for at least a mid-range plan in terms of quality to keep their health insurance premiums stable over time.
Take advantage of the benefits of the German private health insurance system. You can choose your insurance coverage almost as freely as you wish. While public health insurance offers the same coverage to everyone (e.g. same dental coverage), you can choose higher coverage in private health insurance in Germany. You can even waive the coverage you don’t want to save on premiums.
Important: Coverage of the public is the absolute lowest possible allowed by the German social code (1 star coverage). Coverage of any German private health insurance has to be at least 1 star as well and can reach up to 5 star luxury coverage.
You would like high-quality German private health insurance but don’t want to pay a high premium? That’s understandable! Choosing a higher deductible might be a suitable option for you. A higher deductible or co-payment is a neat little trick that will make a higher-quality plan more affordable as it results in a cheaper monthly health insurance premium.
When comparing different coverages of different German private health insurance plans, it can get confusing very quickly when trying to compare all details. That is why we at PerFinEx like to work with star levels from 1 star to 5 stars (like hotels). The higher the stars, the more coverage you will enjoy.
Depending on the coverage stars, you will get different German private health insurance companies and plans that are good. Some companies and plans are good at the mid-range coverage star level, while other insurances and plans are better at the higher star level. If you would like to get some help in choosing the right plan with the right coverage for you, feel free to secure a free meeting with us here.
Which private health insurance is best for you? Let’s find out together.
#3 When choosing Private Health Insurance In Germany: Cashback
The final factor in finding your perfect German private health insurance is the cashback model that best fits your personal situation. Compared to public health insurance, the cashback makes German private health insurance even better. Why? Because public health insurers in Germany offer very little cashback (if any).
When members of private health insurance in Germany visit the doctor or dentist, they get sent the invoice to their home. Afterwards they can decide what to do with that invoice: Either pay themselves or send the medical bill to their German private health insurance company by making a photo with the respective mobile app.
Why should you pay medical bills yourself instead of having your German private health insurance company pay them? They will reward you with cashback if you don’t send bills to your health insurance company. So be a good customer and get back a portion of the monthly premium you paid the previous year.
For this reason, many people with private health insurance in Germany choose to pay medical bills themselves. This way, they get money back instead of sending bills to their German private health insurance company and increase their net income. Some insurances pay more than 1.000€ or 2.000€ in annual cashback.
Cashback models can differ from plan to plan. Some plans pay a high cashback in the first years and rise lower over the years. Other plans pay a comparatively low cashback in the beginning and rise higher the longer you don’t send invoices to your insurance. Think about the time you plan to be in Germany and choose the best cashback model for your individual situation accordingly.
Cashback is a great way to save money in the private health insurance system if you choose a plan that offers cashback. The German private health insurance company that claims to be the only English-speaking private health insurance in Germany (starting with “O” and ending with “nova” 😉) seems to be the only company that offers no cashback at all.
“The cheaper your private health insurance plan is in the first place, the lower its quality. Low-quality private health insurance plans will rise higher in costs than high-quality plans.”
Conclusion: How to pay only 5% for German private health insurance
At the beginning of 2022, an established (also English-speaking 😉) German private health insurance company decided to make a significant change to one of its plans that can be very exciting for everyone who wants to change his private health insurance plan or wants a switch to German private health insurance for the first time.
It is a 4-star plan in terms of coverage with a 0€ deductible, so a very suitable plan for expat health insurance in Germany. After receiving your annual cashback, this German private health insurance plan will cost you only 5% of the monthly premium that you pay. Here is how the plan works in detail:
- 500€ monthly premium = 6.000€ annual premium (exemplary numbers)
- 45% cashback = 2.700€ from the 3.000€ premium you have to pay (+3.000€ from employer)
- 3.000€ premium – 2.700€ cashback = 300€ annually (or 5%) you are paying for health insurance
Prior to 2022, this German private health insurance plan required you to not hand in any invoices for 4 continuous years in order to receive 45% cashback. Now with the new change, you can start immediately with the highest cashback percentage if you can prove that you had very few medical costs in the last 3 years (in public or private) before switching to this plan.
Not just that this plan would cost you about half of what public health insurance is charging you (before cashback), but it is also a 4-star coverage plan compared to 1-star public health insurance. After receiving your annual cashback this German private health insurance plan is basically costing you 25€ per month.
If you are thinking of improving your German private health insurance, you can secure a free meeting with us to discuss your personal situation. As we are insurance brokers (and no insurance agents), you can be sure that we will give you independent and unbiased advice.