Can I cancel private health insurance?

Under what conditions is it possible to cancel private health insurance?

There are two ways to cancel a private health insurance contract:

1. ordinary termination
2. extraordinary termination (also known as special termination)

But when is which type of termination of private health insurance possible and who has which right of termination?

Ordinary termination: Can you cancel private health insurance at any time?

According to Article 205 of the German Insurance Contract Act (VVG), ordinary termination of private health insurance is always possible with a notice period of three months to the end of the insurance year.

The insurance contract with the private health insurance company specifies when the insurance year ends. It may be identical to the calendar year, in which case notice of termination must be given by September 30 at the latest, but it may be different.

If the private health insurance company with which the contract exists has minimum contract terms, it is only possible to cancel the private health insurance contract at the end of this period. Information on this can be found in the insurance conditions.

Extraordinary termination: Who has a special right of termination in private health insurance?

Under certain circumstances, policyholders have a special right of termination and can cancel without notice. In these cases, the special right of termination applies to private insurance policies:

• Increase in premiums
• Change to statutory health insurance (under 55 years of age):
  • Compulsory insurance in statutory health insurance: falling below the compulsory insurance limit/annual income limit = income of €69,300 gross per year from 2024 (employees are immediately subject to compulsory insurance and can cancel retroactively within 3 months).
  • Entitlement to free family insurance under statutory health insurance (even after the age of 55): However, income must still be higher than 505 euros per month.
• Unemployment and receipt of ALG I
• Moving abroad
• Entitlement to military service (e.g., as a police officer, prison officer, or soldier)
• Withdrawal from the contract with the insurer (within 2 weeks of concluding the contract)

Additionally, there may be the option for policyholders to apply for an exemption from compulsory health insurance or to stay in private insurance under certain circumstances, even when compulsory insurance would otherwise apply.

Special right of termination means that the period of notice may be shortened under certain circumstances. The notice period differs depending on the reason (e.g., premium increase, change to statutory health insurance) for extraordinary cancellation with the health insurer.

How to cancel private health insurance

There are a few points to consider when canceling with insurance companies:

• Private health insurance must be canceled in writing (possible by e-mail)
• The clear wish for cancelation must be expressed in the notice of termination
• Notice period must be observed and notice must be received on time (observe minimum insurance period)
• If compulsory insurance applies (change to GKV), proof is required
• Proof of new insurance (PKV or GKV) must be provided within two months (without proof, the termination is invalid due to the health insurance obligation).

The following sample letter "Termination of private health insurance" can serve as a template for the termination of contracts with private health insurance. Incidentally, no reason for termination needs to be stated

Common reasons for canceling private health insurance

There are various reasons why insured persons cannot or do not want to stay in private health insurance (PKV) and therefore consider canceling their health insurance:

• Premium increases or change in benefits
• Moving to another country
• Compulsory insurance in the GKV
• Better offer from the competition

Canceling private health insurance should always be carefully considered, but is possible under certain conditions and in compliance with certain deadlines.

Sample cancelation of private health insurance: What should be included in the termination letter?

§ Insured person number (can be found in the insurance documents)

§ Explicit declaration of termination

§ Date of termination

§ Signature

§ Proof of new insurance, if required

Example text for termination of private health insurance:

((name))

((address))

((policyholder number))

((date))

Dear Sir or Madam

I hereby cancel my insurance policy with due notice, alternative to the next possible date.

Please send me a written confirmation of cancellation stating the date of termination. I do not wish to be contacted by you for the purpose of return advertising. I kindly ask you to please refrain from doing so.

Yours sincerely

((Signature))

What notice periods are there for private health insurance?

The following table shows which regulations apply to policyholders with regard to the notice periods for private health insurance:

What should I keep in mind when canceling my private health insurance?

Insurance is compulsory in Germany. Therefore, insurance cover must remain uninterrupted even after canceling health insurance. Anyone without health insurance would otherwise have to pay medical bills themselves, which they may not be able to afford.

Compulsory insurance also means that insured persons who cancel their health insurance must provide proof of a new contract with another health insurer within two months. Otherwise the termination of private health insurance is invalid.

Insured persons who cancel their private health insurance have two options under certain circumstances.

Change to statutory health insurance

Up to the age of 55: if you fall below the annual income threshold, have the option of family insurance, are unemployed and receive unemployment benefit I

From the age of 55: switching is more difficult (e.g. if family insurance is possible)

If self-employed (up to age 55): only if employed and income is below the annual income threshold

2. change private health insurance

Which disadvantages can a termination of private health insurance have?

Canceling private health insurance and switching to another private health insurer can have some disadvantages for policyholders.

The consequences for private patients can be higher premiums. The decision to switch should therefore be made on an individual basis.

Old-age provisions are lost

When you change private health insurance, some of the aging provisions you have saved are lost. These reserves are a savings component in the premium for insurance, which makes it possible to keep private health insurance premiums stable in old age. For contracts concluded with the PKV before 2009, these provisions are completely lost when switching. 

However, this does not apply to expat tariffs, as no aging provisions are built up in these types of insurance plans.

New health check required

With the new private health insurance, applicants must pass a new health check. The new higher age and any pre-existing conditions are then taken into account when calculating the premium. This can result in higher risk surcharges than with the old private health insurance because illnesses have occurred during the insurance period.

Limits on the amount of coverage

If you change insurer, you may not be able to claim all benefits in full from the outset. This is because some private insurers have limits on the amounts of certain services, such as for dental treatment.

Premium increases possible even if you change provider

Premiums can of course also be increased with the new provider. However, when switching to ottonova, policyholders opt for private health insurance with more stable premiums thanks to a future-proof actuarial interest rate.

Is it possible to return to the old private health insurance tariff?

If you wish to return to private health insurance (stay abroad or temporary switch to statutory health insurance), it may make sense to take out a qualifying period.

A qualifying period means that contracts are frozen. The insured person then pays a reduced premium per month, but is not entitled to benefits.

Advantages of a qualifying period:

• Small prospective entitlement: No new health check when returning to the same or lower-benefit tariff

• Large prospective entitlement: Retirement provisions (savings portion for stable premiums in old age) are retained and continue to be built up.

• Without a qualifying period, premiums can become significantly more expensive when returning to private health insurance, as the insured person is now older and the premiums for private health insurance are calculated according to age, state of health and the desired benefits.

When is it worth switching to another private health insurance provider?

Switching private health insurance providers can be particularly worthwhile if the contract with the current private health insurance company has not been in place for long and not many old-age provisions have been saved up.

It is also advisable to consider to cancel the contract with the insurer if the current tariff is very weak and there are tariffs with more benefits for the same premium with another insurer.

You should also consider how many provisions are set aside and what actuarial interest rate the private insurer uses to calculate its policyholders' premiums in order to keep them stable in old age.

Are there alternatives to canceling private health insurance?

There is not always an alternative to terminating the contract with the PKV. If an insured person becomes subject to statutory insurance, for example if their salary falls below the annual income threshold, there is often no alternative but to switch to statutory health insurance. Only in certain cases is it possible to be exempted from compulsory insurance and remain in private health insurance.

However, if the policyholder wants to reduce costs, an alternative to terminating the contract is to change tariff within the PKV, for example to a tariff with fewer benefits.

The advantage of this is that if the change is made with the current insurer, the old-age provisions are retained and there is no need for a new health check (except when changing to a higher-benefit tariff).

Please note: If the insured person then wants to switch from the lower-benefit tariff back to the original tariff, a new health check is also required. The same applies if the deductible is to be reduced.

For what reasons may the PKV cancel the contract?

Due to the health insurance obligation in Germany, the PKV itself may only terminate the contract in special cases and not ordinarily (§ 206 VVG).

In these cases, the private health insurance company may cancel the contract:

• Serious breach of contract (e.g. by fraudulently obtaining benefits through falsified information in statements)

• Deception or fraud (e.g. serious misrepresentations such as deliberately false health information in the risk assessment)

• No termination in the event of unintentionally false information (but risk surcharges are then possible)

In the worst case, the insurance company will not only cancel the contract or withdraw from the contract with the insured person. It is also possible that benefits received/prohibited must be repaid to the private health insurance company.

The private health insurance company must also comply with notice periods. The notice period is one month after the breach of contract becomes known.

In the event of fraudulent intent or deliberate deception, termination is possible within ten years.

In the event of a serious breach of contract, termination is possible within 5 years.