Is the private security business profitable
Many consumers want to improve their statutory pension with a private pension insurance. But be careful, you have to get old to get a good return. And those who quit early are left with high costs. Our conclusion: not recommended. Prepare for old age differently!
A private pension insurance is a savings contract. It pays the insured person a monthly pension at the agreed time or, if desired, a lump sum.
Annuity insurance is often sold - also as a Riester variant - but is not very profitable, especially in the event of an early exit; the contracts are also opaque and inflexible.
- High costs reduce the already meager return: The guaranteed interest rate for new contracts is just 0.9 percent. Before that, there are also administrative and closing costs, which become a nuisance, especially in the event of early termination.
Those who terminate the contract in the first few years (and there are quite a few) often only get back just under half of the contributions paid. The reason: The high costs are not distributed over the term, but are retained from the contributions at the beginning. So whoever signs a contract slips a few hundred or thousand euros into the red.
For all those who stick to the contracts, the insurers assume a very high life expectancy, so that the insured have to get very old for such a contract to pay off.
- TheContracts are completely opaque. It is practically impossible for consumers to check the amounts paid out, such as surrender value or expiry benefit.
The insurers say you get a guaranteed interest rate and surpluses as well. It is kept secret that the guaranteed interest only applies to part of the premium, namely the one that comes out when costs have been deducted. The surpluses only exist if the company earns more than the promised interest or if the costs for administration and / or risk protection are lower than required. Neither the generation nor the reduction of surpluses are understandable and verifiable for consumers.
- Like endowment insurance, private annuity insurance offerslittle flexibilityin order to be able to react to changed living conditions. With terms of 40, 50 or even more years (pension insurances usually go from the time of conclusion to the end of life), they tie up a lot of money over a very long period of time.
By the way, unit-linked annuity insurance is even less recommendable. In addition to higher costs, they also pass on the risks of the stock market to the customer.
Prepare for old age in ways other than private pension insurance. Separate “Insure” and “Save” from one another.
First of all, you should take out the important insurances, i.e. liability insurance, occupational disability insurance and - for everyone who has to look after someone - also term life insurance.
If you still have money left over to save, you can invest it for the longer term with classic savings investments or invest in an index fund or real estate as an advanced saver.
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