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03.04.2023 16:33
At a young age, many self-employed people decide to take out private health insurance. But that can quickly become a challenge as you get older.
Cost trap private health insurance? For some self-employed people, this applies to old age. (Photo: Pixabay)
Private insurance for the self-employed can become a serious problem in old age. This is mainly because the contributions usually increase over time and can therefore represent an enormous financial burden. In addition, private insurance is usually designed for a specific term and can therefore expire in old age, which causes further problems.
A major reason for the growing contributions is the demographic development. Increasing life expectancy means that insurers have to bear higher costs for health insurance and old-age provision. These costs are often passed on to policyholders, which in turn leads to increasing premiums for them. In addition, the self-employed do not have a company that bears the costs for the insurance jointly, which is why they have to pay them completely on their own.
Another problem arises from the limited term of private insurance. Most contracts are designed for a specific duration, which is usually between 20 and 30 years. When this period of time has expired, policyholders must take out new insurance. However, since they often have to struggle with previous illnesses in old age, the contributions for new insurance can be very high or they are even rejected.
Another disadvantage of private insurance is that they almost never represent a solidary risk community. That means policyholders who are healthy pay the same as policyholders who are sick. As a result, the contributions for healthy policyholders are higher than for statutory health insurance.
However, there are also ways to minimize the problems with private insurance for the self-employed in old age. An alternative is to start making provisions for old age early and thus build up a financial basis for old age. In addition, the self-employed should inform themselves regularly about their insurance and, if necessary, switch providers if they find cheaper insurance. A combination of statutory and private health insurance can also be a sensible option for self-employed people in old age.
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Tim Krupka is passionate about finance and investing in the stock market. As a freelance writer, he now supports the ANG team with well-founded reports on everything that adds real value to one’s own wealth.