Even though it seems like Germany already has insurance for every possible scenario, safeguarding against severe illness and disease with critical illness insurance (sometimes also called dread disease insurance) isn’t as common yet.
But for Germans (who love insurance) it’s steadily becoming more popular over the last few years. If you’re an expat living in Germany, you might have the advantage of already knowing some of the benefits of this type of insurance.
What’s dread disease insurance (critical illness insurance)?
Dread disease insurance provides financial support if you have a diagnosis for one of the (many!) covered serious illnesses. Typically covered are cancer, multiple sclerosis (MS), stroke, and heart attacks, among many others.
If you are diagnosed with one of these illnesses, you’ll receive a lump sum payment that you can use however suits you best: to cover treatment costs, medication, or to compensate for lost income. For expats, this insurance offers significant security, providing immediate financial assistance in an often unfamiliar health care system.
The risks of serious illnesses and death
Severe illnesses, such as cancer, stroke or heart attacks, can happen to anyone. In Germany, the risk of getting cancer by the age of 70 is around 35-40% for men and 30-35% for women. For heart attacks it’s 15-20% for men and 10-15% for women. Additionally, 5-10% of men and 3-5% of women will require angioplasty (a procedure used to open blocked arteries and to restore blood flow to the heart) before turning 70. Although smaller risks, strokes (5-8%) and MS (0,1-0,2%) can have a serious impact on your life.
In comparison, the probability of dying by age 70 is around 25-30% for men and 20-25% for women. Many of those deaths are caused by severe illnesses, so the risk of developing a serious illness is generally higher than the risk of dying by age 70.
What’s the difference between critical illness and term life insurance?
Term life insurance protects your family in the event of your death. It does not cover or offer financial support if you fall ill with a serious illness. In contrast, critical illness insurance pays out as soon as you’re diagnosed.
That way, you can pay for medical treatments, cover income loss or just be financially stable in challenging times. The payout you receive is there to help you to cope with any financial burden your diagnosis might bring and allows you to focus on your recovery.
Finding the right dread disease plan as an expat
Now that you know what it is, let’s take a look at why dread disease insurance might be relevant for you, explain how the application process works and show you what you need to know when choosing a provider.
Before choosing a policy, you should consider the following questions:
- Which illnesses do you want to have covered?
- What is your desired lump sum?
- How high are the premiums?
- What’s the duration of the policy?
- Which insurers offer dread disease insurance and how do they compare?
- Which policy fits my needs the best?
On top of that, expats should be aware of the language barrier that still persists in Germany’s insurance industry. If your German isn’t so strong, you might want to opt for an insurer that offers advisory services in English, to ensure you have complete transparency.
Critical illness insurance for expats in Germany
Setting yourself up for financial stability if the worst happens is a crucial step to protecting yourself and your loved ones. Critical illness insurance offers a safety net for severe illnesses and diseases and is paid out upon diagnosis to make sure you can focus on getting better as soon as possible.