Construction financing with life insurance?

Hello Goldi,

I’m stepping in for you a bit now, after you’ve come under fire from many sides.

First of all: I am basically NOT a fan of financing with repayment substitution (building society savings contract or life insurance).

With one exception:
If the life insurance (LV) already exists and this contract will be continued anyway. For example, because the contract is now tax-free and has a high guaranteed interest rate or because the contract has been used for years to cover part (or all) of the disability insurance (at the time of signing you were healthier, younger, etc.).

So if the LV will continue anyway – why not use it for repayment at the end? Even if the guaranteed interest rate is under discussion – so far only the guaranteed interest rate for NEW contracts has been touched. You are doing it right – you only calculate with the guaranteed sum (probably nothing more will come out ).
Personally, I don’t believe that the insurers will touch the contractually agreed guaranteed interest rate. Germany is the country where life insurance is the ultimate retirement provision. This would trigger a wave of lawsuits which would have the best chances before the Federal Court of Justice (BGH). Even now, numerous life insurance customers repeatedly go to court because they receive too low a surrender value upon cancellation. Insurers rarely risk a judgment (usually a settlement is reached), as this would become a precedent.
Moreover, no politician who wants to be re-elected in 4 years would risk facing the storm of protest.

Contacts for you would be financial advisors who also prepare somewhat more individually tailored contracts (so not Interhyp – At Interhyp only the standard variant is done by phone or internet) or your insurer.

You should, however, consider possibly choosing the following option: loan with 1% repayment
This way, you repay a small amount already, but are flexible enough to increase repayment at any time or also make a special repayment. This variant has a particular background (keyword assignment and collateral), which the advisor can explain to you better.
You have already recognized the problem with the repayment substitution variant yourself: you pay a fixed interest rate on the ENTIRE amount continuously. Thus, in the end you will definitely have a higher interest burden than with a normal annuity loan.
We plan part of our financing (approx. 15-20%) the same way.

I emphasize again: With an existing life insurance that is continued for personal reasons, I see a purpose. A new conclusion of an LV as repayment substitution is in my opinion irresponsible and only costs unnecessary liquidity.

One thing I do see as actually critical in your consideration:
A newly concluded retirement provision, if it is to be secure, will currently bring you zero point zero. With an LV, the guaranteed interest is only paid on the savings portion. Before that, the company’s costs go off, as well as the costs for coverage. And on top of that the currently historically low guaranteed interest rate.
Therefore, you must consider how to design your retirement provision sensibly (more profitably).

You had to check the market to see what products are available for you. For this, you should direct the advisor to the following product (not the other way around). Financing options are currently available with terms of up to easily 20 years, and at a favorable interest rate! You should just include a flexible module that allows you to adjust the installment flexibly (min. and max. to be checked, as well as how often you can change, which also needs to be checked). Without violating the financing contract! This will cost you a few tenths of a point. The security for the bank can only be provided through the term life insurance.

If you now compare the two cases and calculate the final amount after the financing is fully paid out, the decision to choose a financing option will be very easy for you)). And you can at least indulge the craftsmen (instead of the bank) a bit more, and automatically get higher quality.

Have fun building
Waldemar

Since I have been warned for creating links, I would like to apologize here again to the administration and moderation as well as to the S moderators. I ask everyone not to click the above link anymore.

Regards Waldemar

So, I really have no idea about this, I just know that my parents financed the house that way (loan + life insurance). That's why I typed two keywords into Google... financing with life insurance... loan... or something like that, and only warnings come up next to the explanation of why it was done in the past. -> tax savings. But that no longer applies nowadays, so this financing option no longer makes sense.

I still don't understand, if you say that you can manage a normal loan in the current situation, then just do it. If something goes wrong (unemployment, accident, illness) you still have the life insurance which you can then cancel or borrow against to relieve the pressure. I believe that an option like the one you want is quite expensive. And the argument of peace of mind, as I said, you still have the life insurance that you can access in an emergency.

Hello

it doesn't really matter what you think. A risk life insurance makes sense to secure your family in case of death. A capital life insurance is currently nonsense since it is taxed! Basically, the banks make the rules and there are hardly any that agree to a suspension of repayment in exchange for assignment.