Life Insurance

BSG: Do not automatically cancel life insurance with Hartz IV

According to a ruling by the Federal Social Court (BSG), unemployed people no longer necessarily have to cancel their life insurance when they apply for Hartz IV. According to the court, unemployment benefit II must also be paid if the termination of the life insurance would mean too great a loss for the unemployed (Ref .: B 14 AS 10/13 R). Whether this is the case, however, depends not only on the “loss rate”, but also on the remaining term, the amount of the maturity benefit that is then paid and also on the notice period.

In the specific case had a woman from Husum sued against the rejection of her Hartz IV application. The woman only applied for ALG II for May and June 2007 because she started a new job in July 2007. But she still had 2,125 euros in a savings account and 1,870 euros in her checking account. She also had two life insurance policies with a surrender value of EUR 6,493 and EUR 1,440, respectively. The responsible district rejected the woman’s application on the grounds that her assets were well above the tax exemption of 7,050 euros.

The woman sued the decision, but both the Schleswig Social Court and the Regional Social Court ( LSG) Schleswig-Holstein rejected their request. It was not until the Federal Social Court in Kassel that the woman was right and referred the case back to the Regional Social Court. The LSG should now check whether the loss due to the termination of the life insurance according to the above Criteria are reasonable and whether there is a particular hardship in this case, since the woman only applied for ALG II for 2 months.

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