Altersrückstellung

What is the Altersrückstellung?

Every month a portion of your PKV premium is saved, not spent. The insurer holds that portion, invests it, and uses the return later to soften the effect of rising healthcare costs as you age. That stored-and-invested capital is the Altersrückstellung — the ageing provision.

It is the single mechanism that separates the PKV from the GKV. The PKV runs on a funded model (Kapitaldeckungsverfahren) where each generation pre-funds its own future care. The GKV runs on pay-as-you-go (Umlageverfahren) where current workers pay for current retirees. Both systems are valid. They handle demographic change differently.

Think of the Altersrückstellung as a savings account inside your premium. You do not see it on your payslip, and you cannot withdraw from it directly. It works only by reducing future contributions.

The 10 % legal surcharge (§ 149 VAG)

From your 21st birthday until the end of your 60th year, German law (§ 149 VAG) requires a 10 % surcharge on top of your PKV premium. Every cent of that surcharge flows into your ageing provision. The aim is simple: accelerate reserve accumulation during the years when you are earning well and using healthcare little.

At the start of your 61st year the surcharge ends automatically — not at retirement, but on a birthday. For a €550 monthly premium that is a €50 reduction you will see on your next invoice, regardless of whether you are still working.

What happens to my premium at retirement?

Several effects stack at the retirement transition, and they are often lumped together under “Altersrückstellung” even though they are separate mechanisms:

1. The 10 % surcharge is already gone. It ended at 60, not at retirement.

2. Krankentagegeld can be cancelled. The daily sickness allowance is income replacement, so once you are not earning, it is no longer needed.

3. From age 65, § 12a VAG kicks in. Insurers are required to use part of the reserve (the “Beitragsteil zur Limitierung”) to directly reduce your premium.

4. The DRV subsidy. The German pension insurance (Deutsche Rentenversicherung) adds roughly 7.3 % of your state pension as a health-insurance contribution subsidy.

Together these effects typically produce a 15-25 % drop in the monthly premium around retirement — measurable, but not dramatic.

Why it does not make PKV “cheap” in old age

This is the most common expat misunderstanding. The Altersrückstellung is a dampener, not a windfall. Healthcare costs genuinely rise with age. The reserve reduces the slope — it does not flatten it.

Over a two-decade window (2005-2025), average annual premium growth was roughly:

• PKV: +3.1 % per year

• GKV (at the contribution ceiling): +3.8 % per year

(Source: WIP-Analyse 2005-2025, Wissenschaftliches Institut der PKV.)

The PKV has been the slightly slower mover. But neither system is immune to cost growth, and any article claiming “PKV is stable, GKV is the problem” — or the reverse — is cherry-picking.

What happens if I switch PKV insurers?

Since 2009, German law guarantees a transfer value (Übertragungswert) when you move from one PKV company to another (§ 12 Abs. 1 Nr. 5 VAG, § 146 VAG, § 204 VVG). The catch: only the portion of your reserve that corresponds to the Basistarif level of coverage transfers with you. Anything your reserve holds above that level stays with the old insurer and is pooled back into the tariff's collective capital.

Approximate size of a transfer value in practice:

• Full health cover: ca. €5,700

• Statutory 10 % surcharge (from age 65): ca. €4,600

• Compulsory long-term care insurance: ca. €2,700-€4,000

Exact values depend on age, tariff, and time insured. Before age 50, the transfer value is usually still enough to make a switch viable. From about 50 onwards, the non-transferable portion of your reserve is typically large enough that switching to a new insurer rarely pays off — a tariff change inside your current insurer (§ 204 VVG) preserves the full reserve and is often the better move.

What the Altersrückstellung cannot do

• It cannot be inherited. If the policyholder dies, the reserve stays inside the tariff's collective pool. Heirs receive nothing. A separate life insurance policy is the instrument for survivor benefits.

• It cannot be withdrawn or paid out. It is not a personal account you can access. It only works by reducing future premiums.

• It does not follow you into the GKV. If you return to the public system, the reserve stays in the PKV collective — from your personal perspective, it is lost.

• It does not protect against all premium adjustments. Insurers can and do increase premiums under § 155 VAG when underlying cost assumptions are exceeded — the reserve reduces the increase's size, but does not prevent it.