Now the federal government has agreed on a reform of statutory long-term care insurance as originally planned. In the meantime it looked more like she was going to have a complete falling out about it. But it now seems clear: If the Bundestag and Bundesrat do not demand even bigger changes, then from January onwards some benefits will be canceled and contributions for some will be increased. It will become even clearer that payments from the nursing care insurance fund are not sufficient in the event of care and private provision is necessary.
The federal government wants to change that
The cabinet wants to avoid the deficit of around eight billion euros previously expected for 2027. It has decided that the benefits for care level one will decrease because the relief amount of 131 euros will be deleted. The criteria for assigning care levels one to three should be adjusted and probably tightened. It will also be more expensive for some insured people. Contributions for those without children increase by 0.3 percentage points. High earners pay more because the contribution assessment limit is raised by 3,600 euros per year. Contributions are charged to income up to this limit. Co-insured spouses or life partners will in future pay a premium surcharge of 0.52 percent. Exceptions should apply, for example, to parents of children with disabilities or caring relatives. Contributions will also have to be paid for mini-jobs in the future. For most insured people, however, contributions should remain stable, which is the main goal of the reform.
There won't be many improvements. From 2029 onwards, care services will be adjusted to price increases, prevention will be strengthened and services for young people under the age of 25 in need of care will be increased. A commission of experts is expected to examine further reforms by January 2027. But one thing is already certain: there will remain a large gap in the future that nursing care insurance will not cover. “People should take precautions for this early on,” advises Meike Voß from the consumer organization “Association of the Insured”. "But the risk is underestimated, prevention is neglected. Few consumers ask. Instead, they prefer to take out additional dental or legal protection insurance, and then they don't have the money for care provision." But that is the correct prioritization. Protection in the event of care is the most important thing after private liability and occupational disability insurance.
Simply saving in ETFs is not enough for long-term care needs
But what is the best precaution? You could simply put money aside and save for an emergency. If you save 60 euros in a stock ETF every month as a 30-year-old, you will have saved 190,000 euros by the time you are 70 with an eight percent return per year. After taxes, almost 140,000 euros remain. If he wants to have 3,000 euros of this every month after taxes when he is 70 when he needs care, this sum will last him for about three years, provided it continues to accrue interest at three percent in between. If he were to put the 60 euros into daily care insurance, he could expect 3,000 euros a month regardless of age at care level five - tax-free until death.
This shows that saving for nursing care is too risky. The money would be used up after just a short time. In addition, only when you are older will you have enough money saved for this. If the need for care happens earlier - for example due to an accident - the savings will not be nearly enough. And if the stock markets crash shortly beforehand, you have to sell at a very bad time. The only advantage is that the money is also available for other purposes if the need for care does not arise. The savings would not be lost.
Four insurance options on offer
However, insurance is more suitable for nursing care. There are four forms. Daily care allowance insurance pays a pre-agreed amount each month depending on the level of care. The money can be used freely and the expenses do not have to be proven. This also applies to nursing pension insurance. Here, too, a monthly pension is paid. It is a mixture of savings contract and insurance. This means that if the need for care does not occur, the insured person can get part of their money back, but not in the case of daily allowance. The contribution is significantly higher, sometimes twice as high. It is usually fixed, while the daily allowance fluctuates. The payout for daily allowances is fixed, but for nursing care pension insurance it fluctuates depending on the results on the capital market. A minimum payment can be agreed. However, this guarantee reduces the profits from investing the contributions on the stock exchange.
Nursing care cost insurance is the cheapest option, but is rarely offered. It only pays if certain services are provided. However, proof increases the bureaucratic effort and not every service is subsidized. The other two forms of insurance offer more freedom. All three variants require a health check. If you have pre-existing conditions that increase with age, insurance companies may reject the contract. "That's why interested parties should take out long-term care insurance by the age of 40 at the latest. But most people don't plan to do so until shortly before retirement. That's far too late," says Meike Voß. The younger you are, the lower the contributions are.
If you have previous illnesses, the fourth option is interesting: the state-funded supplementary care insurance, the Pflege-Bahr. This insurance is named after the former Health Minister Daniel Bahr (FDP). The state pays five euros into a private policy every month if the insured person pays at least ten euros. The advantage: no questions are asked about your health status. However, this means that this insurance is mainly taken out by people with previous illnesses, which means that companies have higher expenses. This increases the contributions. For a deposit of 100 euros you get less payout than with a daily allowance. The payment also depends on the level of care; it must guarantee a certain minimum amount - for level five, for example, 600 euros. However, the benefits have not been increased since they were introduced in 2013. “From our point of view, this is expensive insurance that is not tailored to your needs,” says Meike Voß.
Daily care allowance insurance as the best option
For the expert, daily nursing allowance insurance is the best option. “It is the most flexible, cheaper than other options and offers fixed, predictable payouts that are comparatively high.” However, it is no longer cheap; the contributions have risen significantly in recent years as care costs have risen. "This has paradoxical consequences: Some people cancel their insurance shortly before retirement because they can no longer afford it. Especially when they might need it soon." Before terminating the contract, Voß advises reducing the scope of services, for example only paying for higher levels of care. This lowers the contribution.
All well-known insurers offer daily nursing allowance insurance. The analysis house Morgen & Morgen developed it for the F.A.S. compared. It filtered out the cheapest providers for a 30-year-old and a 40-year-old (see graphic). HUK and Arag are in front. VRK, Axa and SDK are more expensive, but don't pay more. Other more expensive tariffs such as those from Barmenia, Allianz and Concordia pay more in the lower care levels.
Only tariffs that included retirement provisions were tested. They are initially more expensive, but later dampen the increase in premiums. Only tariffs were taken that had achieved the highest rating of five, i.e. had a good range of services and met the minimum requirements. "A high-performance tariff is characterized, among other things, by the fact that payments are made retroactively even if the notification is delayed and the insurance cover remains in place if you move abroad. It is equally important that the contract can be continued if membership in the compulsory long-term care insurance ends," says managing director Christian Jaffke. In the event of long-term care, the tariff should also provide for an exemption from contributions. “High-performance tariffs also pay for care level one.” The differences between the offers often lie in the details. “In some cases, tariffs with poor conditions are not even much cheaper than top tariffs.”
For Meike Voß from the Association of Insured Persons, it is also important that the insurer increases benefits with inflation, pays for outpatient and inpatient care and covers the care levels of the statutory nursing care insurance. He should also waive the right of termination so that customers always remain protected.
