Why healthcare costs increase with age
As people grow older, medical expenses typically rise.
This is true for all healthcare systems.
Private health insurance addresses this challenge through a long-term financing mechanism.
Aging reserves
A portion of every premium is set aside as aging reserves (Altersrückstellungen).
These reserves accumulate over decades and are later used to stabilize premiums in retirement.
The statutory premium supplement
German law requires private health insurers to collect an additional 10% premium supplement until the insured person reaches age 60.
This supplement is used exclusively to further stabilize premiums in later years.
After the 60th birthday, this surcharge is removed.
Premium reduction options
Some tariffs allow policyholders to contribute an additional amount during their working years in order to reduce premiums in retirement.
This works similarly to a savings mechanism:
Employer contributions can also apply to these premium-reduction components.
Long-term stability
Together, aging reserves and premium reduction mechanisms are designed to ensure that private health insurance remains financially manageable even after retirement.
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Discuss how ARAG's aging reserves and premium mechanisms secure your healthcare long-term.
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