Costs, fees and taxes for capital life insurance
With endowment insurance, it is important to pay close attention to the costs, fees and taxes incurred, as these can reduce the return on the insurance.
In particular, the closing costs, which can be very high depending on the insurance company and are deducted directly from the contributions paid. Usually they lie between 2 percent and 5 percent of the sum insured. Also the administrative expenses must be taken into account, which are charged by the insurance company and can occur either annually or monthly. These costs reduce the return and should therefore not be underestimated.
Depending on which risk the insurance cover covers, additional costs in the form of risk premiums attack. For example, a higher risk premium has to be paid for occupations with a higher risk. In addition, life insurance policies are subject to withholding tax. A withholding tax on the capital gains is therefore payable upon payment. However, there are exemptions that can lead to tax savings.
You can also cancel a life insurance policy associated with high cancellation costs be, which can account for a significant part of the saved capital. Therefore, it is important to carefully examine the termination conditions and, if necessary, to consider alternatives before making such a decision.