Dear friend,

welcome to Germany, we hope that you got settled quickly.

The german insurance, tax and financial landscape might seem complicated and difficult for you, so we would like to help you understand what many (but not all!) Germans have learned over the years to make sure you benefit most from the system.

The following products are most often recommended for people living in Germany:

Healthcare

Public / statutory health insurance ("GKV = Gesetzliche Krankenversicherung")
• Covers most of your health costs for office-based doctors and hospital visits
• You can choose between ~95 sick-funds that differ in prices and offer different benefits (difference can amount up to €1.000 per year)
• Complementary private healthcare agreements are recommended to ensure an all-round coverage (e.g. dental procedures, sick-days allowance, …etc.)

As an alternative, you have the possibility to switch to the private health insurance system ("PKV") which often has better conditions and can be cheaper. This requires an income of more than 69.300€ per year.

Private health insurance ("PKV = Private Krankenversicherung)
• If you are self-employed, or an employee with an income of >69.300€ per year
• Office-based doctors and hospitals will send you a bill directly that needs to be forwarded to the insurance to get your money back
• Monthly premium depends on your individual age and health status

Pension

Public / statutory pension insurance ("GRV = Gesetzliche Rentenversicherung")
• The GRV Covers only parts of your income (~35% for the young generation) after the age of 67. Therefore, additional private pension plan are highly recommended to fill the gap.
• Your equity can be transferred abroad when returning to your home country
• Multiple support options are available to you (employer support, grants from the state, tax reliefs etc.)
• Statutory nursing care insurance ("Gesetzliche Pflegeversicherung")
• Covers costs in case nursing care is required later in life

Work

Statutory unemployment insurance ("Gesetzliche Arbeitslosenversicherung")
• Continues to pay part of your income during a period of unemployment
• Accident insurance ("Unfallversicherung")
• Statutory accident insurance is provided automatically by your employer, and it secures accidents on the way to and while at work
• Additional private accident insurance is recommended to cover non-work related accidents
• Occupational disability insurance ("Berufsunfähigkeitsversicherung")
• Private insurance which covers 100% of your income for any reason of disability to work

Other

Liability insurance ("Haftpflichtversicherung")
• In case damage or harm is caused by you to another person, compensation costs are covered up to several million Euros


Home contents insurance ("Hausratversicherung")
• Covers damage to your home contents due to burglary, fire, water damage and storms


Legal insurance ("Rechtsschutzversicherung")
• Covers costs for attorneys should you get into legal disputes

Additional considerations

Financial investment opportunitites
• Bank accounts are unprofitable (Interest rates lower than inflation rates)
• Saving plans for investment depots are highly recommended and can be subsidized by your employer “Vermögenswirksame Leistungen”)
• Building a plan for real estates to escape the rising rents and benefit from other people paying rent to you


Tax optimization
• Certain financial products can reduce your tax burden considerably

We know the German financial system might seem complicated, and it might well be one of the more complex ones. So if you want to make a personal plan to benefit most from the German system, feel free to contact us for a free consultation: Formular Kontaktaufnahme Video Melvin