Frankfurt Canceled orders, worries about money, fear of existence: The corona crisis affects many people financially. The measures to curb the spread of Covid 19 are a turning point, especially for many self-employed and small entrepreneurs: Because of the coronavirus pandemic, shops, music schools, sports venues, restaurants, pubs and hairdressing shops have to close until further notice, and many employees are being sent into short-time work .
Anything else that has been done automatically can suddenly cause problems – such as regular payments for the insurance premium for life insurance or the motor vehicle policy.
The rule is actually clear: the customer pays his premiums on a regular basis, and the insurer pays compensation in the event of an emergency. But what happens if the insured are now lagging behind in contributions due to the corona crisis?
It is not a trifle. Like rent debts, premium debts in the insurance industry can lead to termination. But it doesn’t have to go that far. “If you have any payment problems, contact your insurer immediately,” advises lawyer Rita Reichard from the Consumer Advice Center North Rhine-Westphalia. The most important thing is often the fast and honest communication with the company.
“Make it clear that your financial situation is currently tight,” recommends the lawyer. There are often ways to avoid smaller bottlenecks. The insurer is often accommodating because very few companies want to lose their customers.
2. Is the insurance cover gone when I receive a reminder?
No, it doesn’t happen that quickly. “With existing insurance contracts, protection has not expired at the first warning,” says lawyer Reichard. If the company has already sent a reminder to the customer, the customer should better observe the payment deadline set in the reminder. Otherwise, the insurer could refuse to settle damage, for example in the event of a break-in, and terminate the contract without notice.
If it is a new contract, the consumer would have to transfer the first contribution at the latest two weeks after conclusion, unless otherwise agreed. “Otherwise, the insurer may withdraw from the contract and you are unprotected should something happen in the meantime,” says the lawyer at the consumer advice center.
3. What should I do if I assume a long-term lack of money?
If consumers experience permanent payment problems as a result of the corona crisis, it is possible that, in agreement with the insurer, the customer may temporarily suspend the premium payments for certain policies, suspend the contract or even reduce the premiums, for example by switching from monthly to annual payments. If the contract is suspended, there is no insurance cover for this period. In the case of a deferral, the payment can be suspended for a few months, the contract continues with the same insurance cover, after which the outstanding amounts are paid.
For example, HDI Leben, including the HDI Pensionskasse, is offering its customers to immediately apply without concrete evidence that they will suspend their contribution payments for up to six months until December 31, 2020 at the latest (“Corona break”). The insurer too The Bavarian grants “non-bureaucratic deferral of payments of up to three months” in life insurance, which can be extended to up to twelve months depending on the type of contract.
In the case of a capital-forming life insurance policy, the legislator has also provided that the insured can set their policy free of contributions. “But consumers should think twice about this step,” warned attorney Reichard. “Because that usually cannot be reversed.” Insured persons should therefore first check whether there are other ways to save the money.
4. Can I also transfer money for a motor vehicle policy?
This is not really possible because it usually goes hand in hand with decommissioning the vehicle. “With regard to liability insurance – in contrast to partial or comprehensive insurance – motor insurance is, like private comprehensive health insurance, compulsory insurance that cannot be easily suspended,” says lawyer Reichard. However, the legislature has introduced a law to mitigate the consequences of the Covid 19 pandemic, which gives customers more options.
For example, consumers who are in need of payment due to the crisis may suspend payment of their bills under compulsory insurance for up to three months. “In my understanding, this applies to motor vehicle liability policies and full private health insurance,” says Reichard. However, the insured person must prove that Corona is experiencing payment difficulties.
The first insurers are also accommodating to their corporate customers. Gothaer Versicherung, for example, offers its entrepreneurial customers non-contributory pension insurance without official decommissioning in motor vehicle liability insurance. However, the vehicle must not stand on the road because it could cause damage there even when it is idle, but in a garage or on a “fenced-in space”.
5. Should I terminate contracts if money is short?
Fast shots should be avoided by insureds, advocate Reichard advises. However, consumers could sort their policies by importance.
Existentials such as private liability insurance or occupational disability insurance should not be questioned lightly. “If you get out of the BU now and are older, you may later have problems finding insurance at the old conditions,” warns the lawyer.
Basically, there is no reason to terminate certain private insurance contracts because of Corona, explains the Federation of Insureds. Sometimes there is time to check your own policies. Fully comprehensive protection for an eleven-year-old car, for example, is not always appropriate. The same applies to insurance companies where the possible damage is manageable, such as a mobile phone policy or glasses insurance.
6. Do I have to fear Corona for my old-age provision in life insurance or Riester pension?
Private life insurance and a classic Riester contract usually offer a premium or interest guarantee. Insured persons should therefore get at least what they have paid in. However, Riester fund savings plans have felt the crash on the stock exchange.
As part of the statutory risk management, fund providers have therefore already separated from equity shares and switched to bonds. The providers are concerned that otherwise they will not be able to guarantee guaranteed premium receipt.
If the share prices rise again at a later date, the recovery could largely bypass the Riester fund savers, as the Baden-Württemberg Consumer Center warns. Only when the providers have secured the capital guarantee do they invest the remaining capital in shares.
Insured persons who have taken out fund-based life insurance that is to be paid out this year must also worry. “In such a case, it is certainly worthwhile to find out whether it would be possible to extend the contract in the hope that the prices will rise again,” says Hermann-Josef Tenhagen, head of the non-profit consumer portal “Finanztip”. Because all the money that was invested on the stock exchange is currently affected by the price slide in recent weeks – and has become significantly less.
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