By 2035, the number of people aged 67 and over in Germany will rise from 16 million (as of 2020) to 20 million, according to the Federal Statistical Office. With an aging population, it’s important to consider long-term care insurance.
This article provides an overview of the key points to help you prepare for the future in the event of a loss of autonomy.
1. What Is Long-Term Care Insurance?
Long-term care insurance is part of the German social security system. It is funded through contributions and managed by the long-term care insurance funds (Pflegekassen).
It covers the long-term care needs of individuals facing a loss of autonomy. Whether for home care or care in a facility, this insurance provides partial coverage of the costs associated with necessary assistance.
It is mandatory in Germany, and employees are automatically covered through their health insurance (public or private). However, the basic coverage may not always be sufficient to meet all needs in the event of dependency.
Statutory long-term care insurance is public up to an annual salary of €62,100. The mandatory contribution is 3.4% of gross salary, split equally between employer and employee. Individuals without children must pay an additional contribution of 0.6%.
Good to Know: The status of a dependent person does not only apply to the elderly — it also
2. How Does It Work?
Long-term care insurance is based on an assessment system that classifies dependency into five levels (Pflegegrade). Depending on the degree of dependency, the duration of care, and the type of support required, financial assistance is provided either as in-kind benefits (such as home care or institutional services) or as cash allowances.
In addition, there are private long-term care insurance options that can enhance the basic public coverage, offering extra benefits such as personalized support or more comprehensive coverage in care facilities.
To be eligible for benefits, you must have been insured for at least two years before the need for care is recognized. For children, this period is considered fulfilled if one of the parents meets this condition. You must apply through your health insurance fund.
3. Why Take Out Long-Term Care Insurance?
Subscribing to long-term care insurance is a way to maintain your independence and ease the burden on your loved ones in the event of a loss of autonomy. Here are some key reasons why it is crucial to be protected:
- Avoid Unexpected Financial Burdens: The cost of long-term care can be high, especially in care facilities, and public support may not be sufficient.
- Reduce the Burden on Loved Ones: In Germany, family members can be required to contribute financially to the care of a dependent relative. The right insurance can help ease this responsibility.
- Prepare for a Peaceful Retirement: For expats, retiring in Germany often means planning ahead with reliable support solutions in case of future dependency.
By anticipating these needs with long-term care insurance, you create a more stable living environment — even in a situation of dependency.
4. How to Choose the Right Plan?
To select a long-term care insurance policy that fits your needs and your situation as an expat, here are a few key points to consider:
- Assess the Benefits Offered: Some insurance plans offer more comprehensive coverage, such as specific support services or full coverage in care facilities.
- Review Exclusions and Limitations: Some insurance plans may impose limits on certain types of care or include waiting periods. It’s essential to understand these details to avoid unpleasant surprises.
- Compare Premium Levels: Premiums may vary depending on the level of coverage. Reviewing your budget and priorities is a key step toward making the right choice.
- Seek Guidance from an Advisor: A specialist advisor in expat insurance can help you better understand the specifics of the German system and make an informed decision.
Conclusion
In summary, taking out long-term care insurance helps protect against the financial risks associated with a loss of autonomy and ensures a better quality of life for you and your loved ones.
Book an appointment with our advisors for personalized support.