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Types of insurance

What kinds of life insurance are there?

Life insurance protects the livelihood of the insured or his/her family. Life insurance may be taken out for death, but also for living.

  • Term life insurance pays compensation to the beneficiary if the insured dies during the validity of the insurance. The amount of insurance compensation is agreed in advance. The term beneficiary means the person designated as the recipient of the compensation. Term life insurance is so-called pure risk life insurance, which does not involve saving.
  • Endowment insurance pays out compensation if the insured is still alive when the insurance period ends. Endowment insurance can be pension insurance or savings life insurance.
  • Sickness insurance pays out various expenses, daily allowances or one-off compensation for sickness or accident incurred by the insured person.

What kinds of non-life insurance are there?

Typical non-life insurance policies comprise fire, water damage and theft insurance for buildings and movable property, which are sold together as home and property insurance.

Home and property insurance often also includes liability insurance and legal expenses insurance. Liability insurance compensates persons or organisations other than the insured in accordance with the Tort Liability Act. Legal expenses insurance compensates for expenses incurred in legal proceedings.

Non-life insurance also includes mandatory traffic insurance for traffic accidents (third party) as well as casualty and collision (casco) vehicle insurance for damage caused to one’s own vehicle (comprehensive).

In addition, non-life insurance includes sickness insurance and voluntary accident insurance granted by a non-life insurance company, which pay out various expenses, daily allowances or one-off compensation for sickness or accident incurred by the insured person.

Non-life insurance companies also provide mandatory statutory accident insurance policies that pay compensation to employees injured at work or in work-related circumstances (for example on business trips). Entrepreneurs may also insure themselves with statutory accident insurance.