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CORONAVIRUS and your insurances

CORONAVIRUS and your insurances

No real need to point out the current crisis will be having a dramatic impact on people´s lives – not only possibly health-wise but financially. People will be losing their jobs or be paid for fewer hours and self-employed relying on continued or new contracts with their clients could suffer a substantial drop in their earnings.

This is bad enough but how does it affect your insurances.

First of all, if you are self-employed and voluntarily publicly health insured – you should urgently contact your insurer re your predicted  short term/medium term net income. You may be able to reduce your monthly premiums substantially.

If you are an employee and lose your job and are privately health insured, you will likely have to switch to public insurance.

If you are privately health insured and want to reduce costs, you could reconsider if some of the extras you have are worth while and if you could live with a lower cost contract..however, this is fraught with danger itself, given that we are in the midst of a health crisis and you may actually feel better knowing you have the option of a private room in hospital etc.

What you CANNOT do is cancel your health insurance – you must remain health insured in Germany. If you are financially stable and feel “ safe “ re your income  and are potentially a candidate for a more economical private insurance compared to your current public insurance, this may be worth thinking about but the decision to opt for private insurance is not one to be taken lightly and I would urge professional objective advice first.

How are German insurance companies reacting? Increasingly, they ARE reacting and taking steps to help their clients:

Private health insurance: more and more companies are now offering clients to chance to opt for a  short term premium holiday of three months (ie stop paying ) but with the obligation to back pay within 6  months. You stay 100% health insured during this “ premium holiday.” (In German: Beitragsstundung).

Private pension plans: again, the option to opt for a short term premium holiday of up to three months with the obligation to pay back within six months.

Other areas being worked on for premium holidays include occupational disability insurance and other biometrical insurances.

It is dangerous just to wildly try to cancel some insurances such as those involving income protection. This could be a  worse solution than cancelling if you suddenly do become gravely ill and cannot work anyway and again lose even more potential to earn an income.

Though not insurance-related: all German Bundesländer are now coming out with emergency aid programs called Soforthilfe for the self-employed, including a one-off tax free payment, which will not need to be paid back. The amount accessible depends on many factors – income expected now and short term and how many employees you have.

There is also the chance to reduce substantially your pre-tax payments for 2020 – though this should only be discussed carefully with your tax accountant. It may or may not be a good idea --- because those lower tax payments would be back charged later if your net income is actually higher than expected in the course of this year.

May we all be safe!