Are there differences in the tax exemption of different insurance benefits?
April 21, 2023 | 30,00 EUR | answered by Katrin Sontheimer
Dear insurance law attorney,
My name is Lorenzo Krüger and I have a question regarding the tax exemption of insurance benefits. I recently took out a private pension insurance and I am wondering if the payouts from this insurance are tax-free. Additionally, I have an accident insurance, from which I would receive benefits in case of an accident. Are these benefits also tax-free?
I am concerned that I may have to pay taxes on the insurance benefits and would like to know if there are differences in the tax exemption of different types of insurance benefits. I want to avoid unexpected tax payments and would like to know in advance how the insurance benefits will affect my taxes.
Could you please explain to me if the payouts from my private pension insurance and my accident insurance are tax-free? Are there differences in the taxation of different insurance benefits and what tax aspects should I consider when choosing my insurances?
Thank you in advance for your support and advice.
Sincerely,
Lorenzo Krüger
Dear Mr. Krüger,
Thank you for your question regarding the tax exemption of insurance benefits. I understand your concerns and would like to help clarify things for you.
In general, payouts from a private pension insurance are taxable. The tax treatment is divided into two phases: the accumulation phase and the payout phase. During the accumulation phase, contributions to the private pension insurance are tax-deductible, but the later pension payments must be fully taxed. The taxable portion is determined by the so-called yield share, which depends on various factors such as the age at the start of the pension. It is important to note that only the yield share of the pension payments is taxable, while the capital portion remains tax-free.
In contrast, benefits from accident insurance are usually tax-free. This rule applies to all insurance benefits paid out due to accidents, illnesses, or damages. Therefore, you do not need to worry about tax payments regarding your accident insurance.
It is important to mention that there are indeed differences in the tax treatment of various insurance benefits. For example, benefits from disability insurance or term life insurance are typically also tax-free. However, there may be exceptions, so it is advisable to inform yourself in each individual case.
When choosing your insurances, it is important to consider the tax aspects to avoid unexpected tax payments. It may be helpful to seek advice from an expert in insurance law to ensure that you make the right decisions.
I hope that this information has been helpful to you. If you have any further questions or would like individual advice, I am at your disposal.
Kind regards,
Katrin Sontheimer
