The Truth About PKV Premiums in Old Age
The most common reason for dissatisfaction with private health insurance is rising premiums with age. While the PKV premium for a 30-year-old is often attractively low, it can double or triple by retirement age. On average, PKV premiums rise by about 3 percent per year — significantly more than inflation and significantly more than GKV contributions.
A calculation example illustrates the problem: someone paying EUR 420 in PKV premiums at age 30, with 3 percent annual increase, will pay EUR 759 at age 50 and EUR 1,180 at age 65 monthly. That's nearly three times the initial amount — with unchanged coverage. In GKV, the contribution would have grown only by the additional contribution increase in the same period.
Why Do Premiums Rise?
Premium increases have several causes. First, general healthcare costs rise through medical advances, new therapies, more expensive medications and more sophisticated diagnostics. An MRI that was rare 20 years ago is now standard — and costs more than a simple X-ray.
Second, individual utilization increases with age — older insured persons visit doctors more frequently and require more treatments, medications and medical aids. A 60-year-old statistically incurs approximately three times the healthcare costs of a 30-year-old.
Third, demographic development plays a role: the insured community ages, and age provisions often aren't sufficient to fully offset cost increases. Regulatory changes, rising administrative costs and high commissions for insurance brokers also contribute.
What Are Age Provisions?
Age provisions (Alterungsrueckstellungen) are a capital buffer that PKV builds to cushion higher costs in old age. Every insured person pays a premium portion in younger years that is saved and earns interest. This capital is dissolved in old age to stabilize premiums — at least in theory.
The problem: age provisions are calculated based on assumptions that often prove too optimistic. When actual cost increases exceed assumptions, premiums must be raised despite provisions. Additionally, age provisions are only partially transferable when switching insurers (the basic tariff portion since 2009), making it difficult to switch to a cheaper provider.
Premium Relief Tariffs: Provision for Old Age
Many PKV insurers offer premium relief tariffs: you pay a voluntary additional premium during your working years (typically EUR 50 to 150 monthly), which is used to reduce premiums in old age (typically from age 65 or 67). The relief can be EUR 100 to EUR 300 monthly, thus significantly reducing the premium burden in retirement.
Whether a premium relief tariff is worthwhile depends on your age and the interest rate. The earlier you start, the better the ratio of payment to relief. A 30-year-old paying EUR 100 monthly into a relief tariff can expect relief of EUR 200 to 250 from age 67. A 50-year-old would need to pay significantly more for the same relief.
The Statutory 10% Surcharge from Age 21 to 60
From age 21 to 60, PKV insured persons pay a statutory surcharge of 10 percent on their premium. This surcharge is used from age 65 for premium stabilization and is intended to reduce the premium burden in retirement. In practice, however, this statutory surcharge alone is not sufficient to offset premium increases.
PKV in Retirement: What Changes?
Upon entering retirement, the employer subsidy ceases, which can amount to up to EUR 421.76 monthly for employees. PKV retirees receive a subsidy from the German pension insurance, but this is limited to half the GKV contribution and often covers only a fraction of PKV costs. With a PKV premium of EUR 800 and a GKV subsidy of maximum EUR 400, the retiree must pay EUR 400 from their own pocket.
The combination of rising premiums and lost employer subsidy can become a significant financial burden in retirement. Plan early: age provisions, premium relief tariffs and realistic retirement planning are essential. Many PKV insured persons underestimate the financial burden in old age and then face the difficult situation of barely being able to afford their tariff.
Conclusion: The Long-Term Perspective Decides
PKV premiums in old age are no secret, but they're often underestimated. Anyone choosing PKV must realistically plan for premium development over 30 to 40 years. Our calculator shows you the cumulative cost development and helps you make an informed decision — a decision that remains sustainable even in retirement.