Private health insurance explained simply

Private health insurance is a good option for those seeking individual health insurance solutions that meet the needs of the insured. But insurance companies and their many technical terms are not always easy for insured persons to understand. Who can and how to take out private health insurance in Germany? Our ABC on private health insurance clarifies.

Medizinisch geprüft - Siegel
Reviewed by our insurance experts

Private health insurance definition: What is PKV?

Private health insurance (German: private Krankenversicherung; short: PKV) is a form of health insurance that exists alongside the statutory health insurance (German: gesetzliche Krankenversicherung; short: GKV) in the German health insurance system. PKV companies offer both comprehensive health insurance and supplementary health insurance. Comprehensive health insurance offers comprehensive health insurance coverage, while supplementary health insurance closes benefit gaps for people with statutory health insurance, i.e. it supplements statutory health insurance.

Is private health insurance worth it for you?

If you are currently insured through the statutory health insurance system be prepared for potentially high costs! As of July 2024, some health insurance companies have increased their additional contributions, leading to a maximum monthly contribution of over €1,100! It might make sense for you to change to private health insurance. Next to saving money you can also benefit from various advantages, like:

  • Tariffs are tailored to the needs of different occupational groups.
  • Tariffs can be customized: The chosen tariff can be customized with additional modules to meet your own requirements and wishes.
  • Preferred treatment: With private health insurance you benefit from the most advanced treatments and shorter waiting times at the doctor's office. ottonova also offers an appointment service, meaning we book and organize your doctor's appointments for you.
  • Contractually agreed benefits: Benefits are not eliminated in old age, whereas this can be the case with statutory health insurance. With ottonova, there are also no tariff-based price/benefit schedules, i.e. no hidden benefit reductions in the event of treatment.

Too complicated?

No problem! We have summarized the most important terms in our health insurance ABC and explained them simply.

Private Health Insurance ABC

A
Aging reserves

In private health insurance, aging reserves (or old age provisions) are portions of your premiums that are set aside so that they can remain as stable as possible in old age.

Allowable charge

The allowable charge is the maximum amount covered by your insurance for a given treatment.

B
Basic tariff

The "basic tariff" is a special tariff that every private health insurance must offer by law (and in which they may not refuse admission). The benefits are similar to those in the statutory health insurance and the contribution may not exceed the maximum contribution of the statutory health insurance.

Blue Card

Non-EU nationals require some form of residence permit if they plan to stay in Germany for longer than 12 months. A Blue Card is essentially the EU equivalent of the US Green Card. It is a simple process that enables highly qualified non-EU professionals to put their talents to use in 25 of the 27 EU member states (Denmark and Ireland are not included).

C
Compulsory insurance

All German citizens are obliged to be insured with health insurance.

Contribution

The contribution is the amount of money to be paid monthly for private health insurance. It depends on age, health condition and desired coverage but unlike in statutory health insurance not on income.

D
Daily Sickness allowance

The daily sickness allowance is the amount you receive from your daily sickness allowance insurance if you are unable to work for a longer period of time. It secures your income and is usually paid from the 43rd day of the illness and until you can work again.

Deductibles

The term "deductible" or "excess" refers to the amount that an insured person pays himself, either as a percentage or in full, in the event of a claim. The amount is determined when the contract is concluded.

E
Earning ceiling

The earning ceiling is the maximum amount of an employee's salary from which health insurance contributions are charged in public health insurance.

F
Family insurance

Family insurance is a special feature of statutory health insurance: If they don't have an income or a very low income, you can insure children and partners free of charge.

G
German health insurance system

All residents of Germany must have health insurance. There are two kinds of health insurance – public or statuary, known as the gesetzliche Krankenversicherung, and private, known as private Krankenversicherung. In short, these two are referred to as “GKV” and “PKV.”

H
Health check

With the health check, also called risk assessment, the private health insurance company uses health questions to evaluate at what conditions it can insure someone according to their health status.

I
Inpatient

If you are an inpatient (stationäre in German), you will be admitted to hospital and assigned a bed and a room. You will stay overnight and perhaps longer to prepare for and recover from surgery or an illness.

Insurance card

Once you select a health insurance provider and tariff and pass any medical examinations required, you will likely receive an insurance card other or another form of ID. This ID card contains information about you and your insurance and enables healthcare providers to bill correctly for their services.

J
JAEG

The JAEG (short for Jahresarbeitsentgeltgrenze = annual treshold limit or upper income limit) is the limit above which employees become exempt from insurance and can switch to private health insurance.

K
"Krankenversicherung"

Krankenversicherung means an insurance against costs incurred due to illness. “gesetzliche Krankenkasse” refers to the statutory health insurance in Germany, whereas “private Krankenversicherung” the private health insurance means.

L
Long-term-nursing care insurance

(Compulsory) long-term care insurance is part of the social insurance system and is intended to protect you from high costs in the event that you need long-term care. Everyone who has statutory health insurance is automatically insured in the social long-term care insurance. Those with private health insurance must take out private long-term care insurance.

M
Maximum rate

The maximum contribution is the maximum amount that can be charged for contributions to statutory health insurance. It depends on the income threshold. From this income onwards, statutorily insured persons pay the maximum contribution.

N
Non-medical practitioner

In addition to doctors and traditional medical professionals, there are many non-medical practitioners in the German healthcare system. It’s a professional title for a person licensed by the state who cures diseases by alternative healing methods.

O
Old-age-reserves

In private health insurance, old-age-reserves (or aging reserves) are portions of your premiums that are set aside so that they can remain as stable as possible in old age.

Outpatient

If you are treated as an outpatient (ambulant in German), you will attend your appointment at the hospital for an examination, treatment, or minor surgery before going home the same day.

P
Premium

The premium is the amount of money to be paid monthly for private health insurance. It depends on age, health condition and desired coverage but unlike in statutory health insurance not on income.

Private health insurance

A private health insurance is a private company that provides health insurance benefits to individuals. These benefits are available as a supplementary tariff (e.g. dental or clinic) for people with statutory health insurance and for those not subject to compulsory insurance as a comprehensive health insurance.

Q
Quote

A quote, also known as cost and treatment plan, is an outline of a project's estimated costs and required resources and how to use and control them.

R
Risk surcharge

The risk surcharge in private health insurance is a percentage or fixed amount that is charged in addition to your premium. It applies to insured persons with an increased risk of medical costs who are likely to use more services in private health insurance than other insured persons.

S
Sickness allowance

The daily sickness allowance is the amount you receive from your daily sickness allowance insurance if you are unable to work for a longer period of time. It secures your income and is usually paid from the 43rd day of the illness and until you can work again.

T
Transfer value

The transfer value is the portion of the old-age provisions that you can take with you when you switch to another private health insurance company.

U
Upper income limit

The upper income limit (or annual threshold limit) is the limit above which employees become exempt from insurance and can switch to private health insurance.

W
Waiting period

The waiting period in private health insurance refers to the time at the beginning of your insurance, in which no costs are reimbursed. However, this is unusual in comprehensive health insurance.

Work visa

If you want to live and work in Germany as a Non EU-Expat, you’re probably going to need a work visa. This visa allows you to live in a country for a certain amount of time. If you want to stay and work longer than 12 month in Germany you have to get a residence permit. You can apply for the residence permit at your local immigration office.

Z
"Zahnstaffel"

Most supplementary dental insurances and private health insurances have a “Zahnstaffel”, dental scale in English, for their insured persons. This determines the maximum amount the insurance will reimburse for dental treatment, orthodontics or dentures in the first few years. After a certain period of time, the entire benefit set out in the tariff is then covered.

Private health insurance to go? Then download our free ABC!

ottonova pkv ABC
PKV explained simply!

Insurance with its many technical terms can be really complicated. Our overview with explanations of the most important terms used in private health insurance helps. Get your free PKV-ABC here!

Marie-Theres Rüttiger
HIER SCHREIBT Marie-Theres Rüttiger

Marie-Theres is online editor for health and insurance topics at ottonova. She researches and writes mainly about private health insurance, (e-)health and digital innovation that make life better.

ottonova sales experts
HIER SCHREIBT ottonova sales experts

Our ottonova team of experts has over 40 years of experience in private health insurance and answers questions about it every day. What are old-age provisions and for whom does private health insurance make sense? What is the actuarial interest rate and which tariff is right for you? They know!

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