Outstanding debt insurance or term life insurance

Hello,

this does not directly relate to construction financing, but it is often offered there as well.

There is so much to read on the internet, I would like to hear your opinion on this.

1.) To cover a death, unemployment, or incapacity for work while properly paying off a home loan over 30 years, which of the two insurances is really better and more sensible? What is the difference?
2.) Is it better to take out this insurance separately or directly through the bank? For example, the KSK would charge me €12,000.

Thank you and best regards

1.) Usually the price. Outstanding loan insurance (i.e. risk insurances with a decreasing sum insured) are generally quite expensive. The likelihood of possible claims in case of unemployment etc. could possibly be difficult and linked to complex conditions. To my knowledge, consumer advice centers advise against this directly.

2.) Taking out the insurance yourself. EUR 12,000 ..... are you serious?

--> Better to take out a (normal) term life insurance for both partners yourself and thus have both partners properly insured for a fraction of the price.

Hello Voki,

does a term life insurance in case of death without unemployment insurance and without disability insurance suffice completely? (Occupational disability insurance is already present for both)

So I secure, for example, the loan amount and do it for the term approximately equal to the loan repayment? e.g. 200,000€ over 20 years.

Life insurance or "term" life insurance? Or is it the same?

A term life insurance is usually a risk premium, meaning that unlike a traditional life insurance, no capital is accumulated and the sum insured is available immediately. At least the loan amount or, as a rule of thumb, five times the annual gross income should be insured.

A disability insurance is rubbish; if anything, one should consider an occupational disability insurance. That is a significantly higher quality coverage.

I think that you have received sufficiently clear information in the green forum.

Thank you.