When it became known at the beginning of 2017 that the interest rate for life insurance would drop by one percentage point, it quickly became clear that classic life insurance would hardly have any future. All those who still have life insurance today have to be prepared for the fact that yields keep falling. On average, contracts will only yield 2.6%, which is 0.3% less than in 2016.
The guaranteed interest rate continues to fall
Many who have life insurance are wondering how the current interest is calculated at all. On the one hand, there is the binding interest promised when the contract is signed, then the so-called maximum technical interest and the ongoing profit sharing voluntarily paid by the insurance companies. Then there is the final profit, which the insurance companies include in the figures for the coming year and which is always paid at the end of the contractual term. The maximum technical interest rate is the best way to see how unattractive life insurance has become in recent years, because since the beginning of 2000, when the interest rate was still four percent, the interest rate fell to 2.25% until 2007. It has been at 1.25% for a good two years and fell again by 0.9% at the beginning of 2017.
New customers are the stupid
Anyone who takes out life insurance today has to for Live the rest of the term with a meager interest rate of only 0.9%, because that is the interest rate that the insurance guarantees. However, the costs for the insurer will once again be deducted from this and there will only be very few customers who can even expect that something will be left of the money they have paid in. Even today, only seven out of 29 insurance companies can guarantee their customers that the costs of paying in payments with a contract that runs for twelve years will not go into negative territory. Even with contracts that run for more than 30 years, the customer can hardly hope to participate in the surpluses in the future and to look forward to a good return on all his contributions.
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