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Biometric insurance: gross premiums fall thanks to higher interest rates!
Term life and occupational disability insurance will become cheaper in 2025. Higher interest rates promise lower premiums and better guarantees.
Biometric insurance: gross premiums fall thanks to higher interest rates!
October 7, 2024 – Surprising twists in the world of insurance! In the coming year, consumers can look forward to significant discounts on term life and occupational disability insurance. But why is that? The answer lies in a survey by VersicherungsJournal, which reveals that not only are gross premiums falling due to the announced increase in the discount rate, but also net premiums. Dr. Guido Bader, head of Stuttgart life insurance, has the key to reducing prices: higher interest profits!
From January 1, 2025, the maximum interest rate for life insurance, pension funds and pension funds will be raised from a measly 0.25 to an effortless 1.00 percent. A clear message: “This increase has a positive effect on the product design of life insurance,” says the GDV. This means that not only can guaranteed pension benefits increase, but positive effects can also be expected for term life and occupational disability insurance!
Upswing through interest!
But how exactly does this work? The gross premiums for BU and term life insurance will be reduced because the discount rate is now up to date. However, there is a small dent in the profit participations: these could decrease while the net contributions remain the same. If you think that sounds a bit complicated, you are not alone! But the experts agree that the new interest rate environment makes many products more attractive.
Like Dr. Guido Bader explains that life insurers can now invest their money better than in the past: “Due to the higher interest rates on the capital market, we can invest the money better than before.” A clear advantage that companies use to do justice to their customers! And that looks like a real win-win situation.
A look into the future of insurance
The survey shows that many life insurers are looking forward to the changes. However, some companies are cautious and are keeping their plans under wraps, while others are already naming concrete steps forward. A trend towards a return to Riester pension insurance could also be imminent.
Fans of insurance news have to be prepared for a special extra sheet: On October 28th, the VersicherungsJournal extra sheet with the title “Get out of the doldrums: Tailwind for life insurance” will be published. Everything that moves the industry is summarized here. Anyone who orders the printed edition of the magazine by October 17th is guaranteed to receive important information! And don't worry: Premium subscribers can even look forward to earlier access. In the digital age, no one is dependent on the old conditions anymore!