No-claims Bonus Explained: German Health Insurance

Like many expats, the sight of an official letter in your mailbox may strike fear quicker than you can say ‘bureaucracy’. Perfect! Another administrative letter wrapped in jargon that’s incredibly difficult to understand if you consider your German to be rusty. Even after you’ve whipped out your trusty Google translate app. However, this time of year is the period of the no-claims bonus refunds from German private health insurance providers. In plain English, this means that one of those official letters you often dread, may actually be free money! Free money? Well, not quite, but close enough.

If you have a private health insurance policy, each year you may be eligible for a no-claims bonus or premium refund. Also known as Beitragsrückerstattung, this is a partial refund of your contributions made to your private health insurance provider if you didn’t make a claim within the previous calendar year.

If this seems too good to be true, consider that in 2022, Allianz paid out € 138 million in no-claims bonuses to their customers. For not claiming medical expenses in 2021. Interested to know more? Read on!

Who is eligible to redeem a no-claims bonus?

Anyone who has a full comprehensive private health insurance policy that does not submit a claim from January- December in the previous year can redeem the no-claims bonus. The only catch is that you must still have a valid contract with the insurance provider by the end of June in the year that you are trying to redeem the no-claims bonus.

For example, if Jenny does not make a private health insurance claim between January 2018 and December 2018, but cancels her health insurance policy and leaves Germany in April 2019, she will not be eligible to take advantage of her no-claims bonus when the refund process for the year rolls around in July 2019. Bad luck, Jenny!

To be eligible for the no-claims bonus, you must also ensure that you’ve paid your regular contributions on time. If you’ve failed to meet any of your contributions or if you’ve had a delay in making any of your payments? Unfortunately you will have to wave your no-claims bonus goodbye.

To underline our first point, the annual no-claims bonus is only offered if you are insured by a private health insurance provider. If you are enrolled in the public or statutory health system, contributions work in a completely different way. As a result, the public scheme does not allow for premium refunds to be issued.

How can you redeem your no-claims bonus?

The good news is that your no-claims bonus is paid automatically. We repeat, your refund and real cash-money is deposited straight into your bank account. This means that you do not have to jump through the usual hoops and go through the pain of calling your health insurance provider in order to claim. This is music to our ears. Expats in Germany, rejoice! This however, is of course not the case if you make your payments manually and your health insurance provider does not know your bank details. In such circumstances, you will be sent a cheque in the mail.

Are you employed by a company who subsidise part of your health insurance payments? You will be pleased to know that you can keep your no-claims bonus refund in its entirety. You do not have to give anything back to your employer.

The terms of your no-claims bonus may vary depending on your health insurance provider

Like anything, there’s always a fine print. Whilst you may be eligible for your no-claims bonus, whether you receive your refund and the amount you receive depends on your health insurance provider’s terms. Some differences to keep in mind include:

  • If you have not made a claim, some health insurance companies may give you a partial premium refund even if you did not start your contract at the beginning of the calendar year
  • The no-claims bonus is not a guaranteed perk offered by all private health insurance providers. Many providers commit to paying your no-claims bonus each year regardless of company profits or the health of the economy. However, others may consider it a voluntary benefit, enjoyed by their clients at their discretion. If this is your health insurance provider, this means that even if you enjoyed your no-claims bonus last year, it does not necessarily mean you will get it this year
  • Some providers don’t consider dental or hospital treatments as part of the no-claims bonus system which means that if you’ve enjoyed these benefits throughout the year, you may still be eligible for your no-claims bonus
  • Many providers offer the pay-out of the no-claims bonus in a way that’s accumulated and reward those who don’t make a claim for an extended period of time beyond just one calendar year. This means that your refund can accumulate and increase depending on how long it’s been since you’ve made a claim. E.g. if you don’t submit a claim for one year, you may receive €300. If you don’t submit a claim for two years, you may receive €600 for that year. Most health insurance providers offer this option to accumulate your no-claims bonus for up to three years

How does the no-claims bonus work with tax?

As many of you are probably aware, private health insurance contributions are deductible from tax. All insured persons who provided their German tax identification number to their private health insurance provider can enjoy monthly tax deductible contributions. When it comes to redeeming your no-claims bonus however, what this unfortunately means is that you will have to pay tax on the refund you receive. Depending on what you pay in contributions and the amount of your total refund, this may still be a relatively low price to pay and still leave you with a substantial bonus.

How to make the most of your no-claims bonus even if you need to make a claim

Loophole alert: even if you require medical or dental attention, you can still benefit from the no-claims bonus. Many make the mistake of making a claim to their health insurance provider as soon as they have paid their bill. But what most don’t realise, is that you actually have up to a year to make a claim. This means that if you can afford to pay for your medical bills up front without immediate reimbursement from your health insurance provider as a result of a claim, you could actually enjoy a much higher return when the no-claims bonus rolls around the following year. Whether you’re better off doing this however, completely depends on your policy so we advise that you get in contact with us at KLforExpats, your health insurance broker, to talk through your best option.

Quick facts on your no-claims bonus (examplary private health insurance companies)

  • Reimbursement dates: by the end of July- mid August annually
  • Additional benefits: you can opt to have your no-claims bonus paid directly into your bank account or take advantage of their special savings scheme whereby you choose to have your no-claims bonus accumulate each year to lower your monthly premiums as you get older
  • Reimbursement dates: by the end of August annually
  • Additional benefits: you can claim vaccinations and preventative outpatient check-ups and dental treatments without impacting your eligibility to receive the no-claims bonus
  • AXA also offers a behavioural health bonus (similar to Signal; see below). E.g. €25 if you prove that your body mass index is healthy, €25 when you get a statement from your GP that you do not smoke, €50 if you proove that you have an active membership in a gym and €50 if you can show you hold a current German sport badge (aktuelles deutsches Sportabzeichen).
  • Reimbursement dates: by the end of October annually
  • Additional benefits: you can claim vaccinations and preventative dental check-ups such as cleaning without impacting your eligibility to receive the no-claims bonus
  • Reimbursement dates: by the end of September annually
  • Additional benefits: you can claim extensive dental treatments (such as crowns and root canals) without impacting your eligibility to receive the no-claims bonus
  • Reimbursement dates: by the end of September annually
Hanse Merkur
  • Reimbursement dates: by the end of September/ start of October annually
  • Reimbursement dates: by the end of July annually
Inter (special rate for expats)
  • Reimbursement dates: N/A
  • Since Inter offers a special rate for expats with certain residential circumstances, Inter does not offer a no-claims bonus
  • Reimbursement dates: Beginning of July annually
  • Additional benefits: offers a special added no-claims bonus on top of the existing refund if you can prove by a way of a form that you are in an optimal state of health. This form takes into consideration factors such as whether you’re a non-smoker, the health of your BMI, your level of cholesterol, and whether you’re up to date with recommended preventive dental care such as cleaning.

There you have it! Everything you need to know about the no-claims bonus refund offered by German private health insurance providers. If you have any questions regarding your eligibility of the no-claims bonus, be sure to get in touch with KLforExpats. Otherwise, we hope that you get to join the millions of people around the country enjoying a special little surprise in their bank accounts over the coming months!

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Mirja Lundehn - Co-Founder of KLforExpats Mirja Lundehn – Independent insurance broker

Co-founder of KLforExpats and licensed insurance expert