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Important insurance policies for families

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Important insurance policies for families

If you have children, there are many things to think about – from everyday necessities to planned gifts and holidays. One topic is often overlooked: insurance coverage. Whether in the event of illness, an accident, or unforeseen circumstances, the right protection can be crucial in an emergency. We'll show you which insurance policies are truly important and worthwhile for your family to ensure optimal protection.

Insurances that are legally required

Besides the sensible insurance policies for families, there are also some that are legally mandatory. In these cases, you don't have a choice about whether or not to take out a policy. These include health insurance, statutory pension insurance for employees, and motor vehicle liability insurance if you own a car.

health insurance

Health insurance is the most important form of protection for families – and for good reason. Whether it's doctor's visits, medication, or even surgery, without the right insurance coverage, things can quickly become expensive. Therefore, in Germany, it is legally required to have health insurance.

Depending on your income and occupation, you can choose between statutory and private health insurance. Both options offer different advantages. In statutory health insurance (GKV), families particularly benefit from free family coverage for children.

Statutory pension insurance

Many employed individuals are legally obligated to contribute to the statutory pension insurance scheme to secure their retirement. Parents even receive credit for up to three years of contributions for raising their children, even if they were not employed during that time. Although the statutory pension insurance scheme is one of the most important forms of insurance for families, it has significant weaknesses. It is foreseeable that the benefits provided by the statutory pension insurance will not be sufficient in the future. Therefore, it is particularly important to make additional private provisions, for example, with an ETF savings plan.

Motor vehicle liability insurance

In Germany, motor vehicle liability insurance is mandatory. It ensures that you are not left with the costs you cause to others through personal injury, property damage, or financial loss in connection with the use of your vehicle in the event of an accident.

Tip: Is your child getting their own car? Car insurance is often particularly expensive for new drivers. It's worth comparing offers carefully. Some insurers offer attractive second-car policies for young drivers, where the contract doesn't start with the expensive no-claims bonus class 0.

Important insurance policies for families

Even though some of these insurances aren't legally required, they are still very important for families. They offer protection against significant financial risks for you and your loved ones. These include personal liability insurance, disability insurance, certain supplemental health insurance policies, and, for homeowners, building insurance. Dog owners should also take out dog liability insurance. Those who are paying off a mortgage or who are a major contributor to the household income should also consider term life insurance to provide financial security for their family.

Personal liability insurance

Private liability insurance is one of the most important types of insurance for families. It protects each insured family member from high claims for damages due to personal injury, property damage, or financial loss – whether playing in the garden with other children or visiting a great-aunt.

This insurance is essential, especially for families with children who love to explore the world. The best part: the premium is usually very affordable!

Disability insurance

Disability insurance is one of the most important types of insurance for working people, especially those with families to support. What happens if you suddenly become ill or have an accident and can no longer work? In this case, your income will quickly become scarce, and the financial security of your entire family will be at risk.

Disability insurance kicks in if you are expected to be permanently unable to work due to an accident or illness. It then pays you a monthly pension to replace your lost income.

Supplementary health insurance

Anyone traveling abroad should take out international health insurance. Within the EU, coverage is limited, and outside the EU, for example in the USA or Canada, you are not covered at all by statutory health insurance. International health insurance ensures that you and your family receive optimal medical care abroad – without having to worry about the costs. The insurance coverage costs only a few euros per year for all family members combined.

Self-employed individuals should also take out daily sickness allowance insurance. If they are unable to work for an extended period due to illness, this puts a considerable strain on their household budget. This supplementary insurance helps to mitigate the financial loss.

Homeowner insurance – for homeowners

Buying a home is the biggest investment most people will ever make. It's an investment that should be well protected. Homeowners insurance is the most important type of insurance for property owners, as it protects your home against risks such as fire, water damage, storms, hail, vandalism, and optionally, natural disasters. With homeowners insurance, you can be sure that in the event of damage, you can cover the repair costs, allowing you and your family to quickly return to your home.

Term life insurance

With term life insurance, you can ensure your family is financially secure in the event of your death. The insurer pays the agreed sum to your beneficiaries. This insurance is particularly important if you own a home with an outstanding mortgage. This way, you can be sure your family won't be left with a mountain of debt.

It's not just homeowners who should consider term life insurance. If there's a primary breadwinner in the family and young children, this type of insurance can help cover ongoing expenses if the breadwinner dies and their income ceases. Mutual coverage is also possible. Such insurance provides parents with greater peace of mind.

Other useful insurance policies for families

Besides the essential insurance policies, there are several that are also recommended for families. They aren't strictly necessary if your budget is already tight, but they represent a valuable addition to your insurance coverage. These include home contents insurance, legal expenses insurance, supplemental health insurance, and accident insurance.

Home contents insurance

Over time, we accumulate a lot of possessions. Home contents insurance acts as a safety net for your belongings. Whether it's a burst pipe, a fire, or a burglary – home contents insurance helps cover the damage. This type of insurance is particularly useful for families with children who occasionally get into mischief or have their own belongings.

Legal expenses insurance

Whether it's a dispute with your landlord, a conflict with your mechanic, or a disagreement with a neighbor – legal expenses insurance ensures you're not alone when facing legal problems. The insurer covers the costs of lawyers and court fees if you need legal assistance. This way, all family members can be sure of receiving professional support in the event of a conflict.

Supplementary health insurance

Supplemental dental insurance is a particularly worthwhile form of protection for families. It complements statutory health insurance and ensures that you and your family receive the best possible dental care – regardless of your financial situation. Children who frequently need braces benefit especially, as statutory health insurance only covers a limited portion of the costs.

Furthermore, additional supplemental insurance policies can extend the benefits of statutory health insurance for the entire family. Besides dental insurance, there are also supplemental inpatient insurance policies that make hospital stays more comfortable. Outpatient supplemental insurance ensures that alternative treatments such as naturopathic or osteopathic treatments are also covered.

For parents who want to financially relieve their children of the burden of long-term care needs, supplemental long-term care insurance is recommended. It ensures that the children do not have to pay for care costs and that the inheritance remains untouched.

Accident insurance

While children are legally insured against accidents at school and on their way to and from school, and parents are also covered at work and during their commute, most accidents occur during leisure time. This includes sledding, skiing, playing with friends, and housework.

Accident insurance provides comprehensive coverage for the entire family. This insurance is valid around the clock – whether at school, at work, or at home.

Private pension provision: An important and sensible form of protection for families

Private retirement savings are among the recommended insurance options for families. The statutory pension alone is often insufficient to ensure financial security in old age. Many face the threat of poverty in retirement if they don't take out additional insurance. Anyone who doesn't want to rely on the state or support from their children should take responsibility for their own retirement planning. This is where private retirement savings come in.

There's a suitable solution for every life situation – whether it's through government-subsidized pensions with subsidies and tax breaks, or through interest-bearing and unit-linked investments that offer either a regular pension or a lump-sum payment. Stocks, funds, and ETF savings plans also offer numerous options for structuring your private retirement savings thanks to their flexibility. This retirement planning is important not only for you, but also for your family!

Our advisors at Badent and Klemm will help you optimally plan and adjust your retirement savings to meet your needs. Together, we'll find the right product for you and your life situation. We'll also review which insurance policies make sense for your family and how you can reliably protect yourself and your loved ones. Contact us!