Why Private Health Insurance Premiums Increase in Germany: The Legal Mechanism Explained
Why private health insurance premiums rise in Germany: the 10% and 5% triggers, the independent trustee, ageing provisions, your options and how to read an increase letter.
Your private health insurance premium does not depend on your income, and it is not meant to rise as you age. It still goes up from time to time. The reasons are written into German insurance law, and knowing them helps you read an increase letter, judge a tariff before you buy it, and use the options you have. This guide explains the mechanism step by step. It was last checked on 16 October 2026.
Quick answer
- Why premiums rise: actual claims in your tariff turn out higher than the insurer calculated, or the calculation assumptions change.
- The legal trigger: a difference of more than 10% between expected and actual claims (or a lower figure in the policy terms), or of more than 5% for mortality. The insurer then has to review all premiums in that tariff (§155 VAG).
- The safeguard: an independent trustee must approve the new premium before it takes effect (§203(2) VVG, §155(1) VAG).
- The cushions: ageing provisions, a statutory 10% surcharge between ages 21 and 60, and the premium refund buffer (RfB).
- Your options: switch tariff within your insurer (§204 VVG), raise the deductible, or in specific cases move to the Basistarif.
The legal basis: three texts that work together
Premium adjustments in full private health insurance (the part that replaces statutory cover) follow three layers of rules. We checked each section on gesetze-im-internet.de.
| Rule | What it says |
|---|---|
| §203 VVG (Insurance Contract Act) | If the insurer cannot terminate the contract in the ordinary way, it may reset the premium when a calculation basis changes in a way that is not merely temporary, but only if an independent trustee has checked the technical calculation and agreed to the change. The relevant bases are insurance benefits (claims) and mortality. The new premium takes effect at the start of the second month after you are notified of it and of the reasons. |
| §146, §149, §150, §155 VAG (Insurance Supervision Act) | Substitutive health insurance must be run on a life-insurance basis: premiums are calculated actuarially, ageing provisions are built, and the insurer cannot terminate the contract in the ordinary way (§146). §155 sets the annual comparison, the 10% and 5% thresholds and the trustee's role. §149 and §150 set the 10% surcharge and the use of ageing provisions. |
| KVAV (health insurance supervision ordinance, issued under §160 VAG) | The detailed calculation rules, including the maximum calculation interest rate (§4), how premiums are recalculated after an adjustment (§11) and how expected and actual claims and mortality are compared (§15 and §16). The older name for this regulation was Kalkulationsverordnung (KalV). Today the rules sit in the KVAV, issued under §160 VAG, and §203(2) VVG refers to a regulation of that kind. |
Together they mean that a premium in this part of the market is calculated on set rules and can only change through a rule-based process, not at the insurer's discretion.
The two triggers: claims and mortality
Every year the insurer compares, for each tariff, what it calculated with what is actually happening. The comparison is made per tariff (strictly, per observation unit within a tariff, such as children and adults, §15(1) KVAV). There are two comparisons.
The insurer compares the benefits it needs to pay with the benefits it calculated. If the difference is more than 10%, unless the general policy terms name a lower percentage, it has to review all premiums of the tariff. If the deviation is not seen as merely temporary, it adjusts them with the trustee's approval (§155(3) VAG).
The insurer compares the mortality it calculated with the latest published mortality tables, using present values. If the difference is more than 5%, it has to review all premiums of the tariff and adjust them with the trustee's approval (§155(4) VAG, method in §16 KVAV).
Two details are worth knowing. First, the 10% line can be lower for your tariff: some policy terms name a smaller percentage, so read the general policy terms (Allgemeine Versicherungsbedingungen) of your tariff. Second, the law blocks an adjustment to the extent that the insurer calculated benefits too low at the start and a careful, conscientious actuary should have seen it at the time (§155(3) sentence 3 VAG). An insurer cannot use an increase to fix an obvious calculation error.
Why increases come in jumps
Many people expect a small rise every year. The law builds in a different pattern. The comparison is annual, but a premium adjustment only becomes necessary once the gap passes the threshold and is not seen as temporary. Costs that grow a few percent a year can therefore sit inside the tolerance for several years, then show up as one larger step. Because the premium is recalculated for the whole tariff at that point, it also brings the calculation back to the current level of costs in a single move.
That is a consequence of how the rules work, not a statement about any insurer's behaviour. It is also why a tariff's increase history over 10 to 15 years tells you more than one year's figure.
Timing rule: a new premium takes effect at the start of the second month after you receive the notice with the reasons (§203(5) VVG). A letter that arrives in November normally means the new premium applies from 1 January.
The independent trustee (Treuhänder)
No increase in this part of the market can start before an independent trustee has agreed to it (§155(1) VAG). The trustee must check that the calculation follows the legal rules. For that purpose the insurer has to give the trustee all technical calculation bases, including the actuarial derivations and statistical evidence. The trustee also has to approve the timing and amount of any use of the premium refund buffer for the oldest insured people, and the use of the performance-linked buffer (§155(2) VAG). When the money is used to limit increases, the trustee has to look at how fairly it is spread between insured people with and without the statutory surcharge, and at the burden on older insured people, both in percent and in euro.
If the trustee thinks a tariff needs an increase or a cut and cannot agree with the insurer, the trustee has to inform the supervisory authority without delay (§155(3) VAG).
What drives the numbers
Medical cost trends
Claims are the first driver. Insurers describe it in their own reports. For example, HanseMerkur's annual report 2025 names inpatient care and medicines as reasons for the increases it announced for 1 January 2026, and Allianz's annual report 2025 names higher benefit spending as the industry driver of premium adjustments. These are the insurers' own statements, not an independent measurement.
The calculation interest rate (Rechnungszins)
Part of every premium is saved as ageing provisions and earns interest. The premium is calculated assuming a certain return, the Rechnungszins. The regulation caps that rate at 3.5% (§4 KVAV). In the long period of low interest rates, returns on safe investments fell below the assumptions older tariffs were built on. When an adjustment is made, the premium has to be recalculated with the current assumptions (§11 KVAV). If the interest rate must be lowered by more than 0.4 percentage points, the regulation lets insurers phase the cut in steps of up to 0.3 percentage points at intervals of 12 months (§11(2) KVAV). For scale: the industry-wide net investment return reported for 2025 was 2.8% (see market context). That is a different measure from the calculation rate and the two cannot be compared one to one, but it shows why the rate used in calculations matters.
Ageing of a closed tariff
Premiums are calculated per tariff. When an insurer stops selling a tariff, few young people join it. The group left in it grows older on average, and average claims per person rise. This is a general effect of how a closed group behaves, and it is the reason independent consultants ask for the age structure and increase history of the tariff you are offered, not only the entry premium.
Mortality
The second legal trigger is the mortality assumption. If people live longer than the table assumed, the cost of covering them rises over a longer period, and §155(4) VAG forces a review once the present-value difference passes 5%.
The cushions: ageing provisions, the 10% surcharge and the RfB
Private health insurance in this form is built so that money is set aside while you are young, to limit premium rises when you are older. Three parts do the work.
Insurers must build them (§146(1) VAG, §341f HGB). When premiums are recalculated after an adjustment, the share of ageing provisions attributed to you is credited in full to reduce the new premium, apart from the part reserved for premium reductions in old age (§11(1) KVAV). That is why a tariff switch inside the same insurer matters: the provisions travel with you (§204 VVG).
From the calendar year after your 21st birthday until the calendar year you turn 60, insurers charge a 10% surcharge on the annual gross premium in substitutive health cover (§149 VAG). It goes straight into your ageing provisions. From age 65 it is used to finance higher premiums caused by increases, and any unused amount is used to cut the premium from age 80 (§150(3) VAG).
The Rückstellung für Beitragsrückerstattung is a buffer of surplus kept for policyholders. By law, interest income that is left over is put into a performance-independent RfB for insured people aged 65 and over, and has to be used within three years to avoid or limit premium increases or to cut premiums (§150(4) VAG). Insurers also keep a performance-linked RfB (§151 VAG). The trustee must approve how and when the buffer is used (§155(2) VAG).
Each year insurers credit policyholders with 90% of the investment income above the assumed calculation interest (§150(1) VAG). Part of the credit goes into the ageing provisions of all insured people, and the part linked to the statutory surcharge is credited in full to the people who paid it (§150(2) VAG).
None of these removes the possibility of an increase. They soften it, and they are largest for the oldest insured. The financial-strength comparison shows each insurer's reported ageing provisions and RfB ratio so you can see the size of these buffers.
What an employer subsidy changes
Employees with private cover receive a subsidy from their employer. By law it equals half of the contribution that would apply to statutory cover on the relevant income, but never more than half of what you actually pay for your health insurance (§257(2) SGB V). When your premium rises, the subsidy rises as well until it hits that cap, so your employer shares part of an increase. Above the cap, the entire extra amount is yours. Freelancers and the self-employed receive no subsidy. See our cost guide for the current figures.
Your options when your premium rises
You can ask your insurer to move you to another tariff with similar cover, and it must credit the rights you have earned and your ageing provisions. If the new tariff offers more benefits, the insurer may add an exclusion or a risk surcharge and a waiting period for the extra part. You can avoid the surcharge and waiting period by agreeing to an exclusion for the extra benefits. You cannot waive this right. Details are in our switching guide.
Many tariffs offer a higher annual deductible (Selbstbehalt) in return for a lower premium. It means you pay more yourself when you claim, so it suits people who rarely use care. It is usually done through a tariff change at your insurer, which makes it a variant of option 1.
Every insurer must offer a Basistarif with benefits comparable to the statutory ones (§152 VAG), with deductible options of €300, €600, €900 or €1,200. A switch into it with credited ageing provisions is open if your contract started after 1 January 2009, if you are 55 or older, or in certain other cases such as having applied for a statutory pension you are entitled to, drawing a civil-service pension, or being in need of social assistance under SGB II or XII (§204(1) VVG). The older Standardtarif has been closed to new customers since the end of 2008. People insured in it can stay in it or ask to be converted to the Basistarif (§403 SGB V). The Basistarif has reduced benefits, so weigh it carefully.
A new insurer starts with a fresh health questionnaire and a new premium calculated at your current age. Your ageing provisions are only partly portable, and only for the part that matches the Basistarif benefits for contracts concluded since 2009 (§204(1) no. 2 VVG). This is rarely the cheapest answer to an increase.
How to read a premium increase letter
The letter should answer six questions. If it does not, ask your insurer in writing.
- Which tariff and which insured person? Increases apply per tariff and per person, so a family can receive several letters.
- Old premium, new premium, start date. The start date should be the first day of the second month after the letter reached you (§203(5) VVG).
- The reasons. The law requires you to be told the reasons that decided the change. Look for whether the cause is claims, mortality or both, and whether the interest assumption was changed.
- Any limiting measures. Insurers often say when they used RfB funds or the ageing provisions to limit the increase for older customers. A one-off premium from the RfB reduces the rise.
- Changes to the deductible or surcharges. An amount-based deductible and an agreed risk surcharge can be adjusted too, if the contract provides for it (§203(2) VVG).
- Your alternatives. You have a right to a tariff change under §204 VVG, whether or not the letter mentions it. Ask in writing for the comparable tariffs your insurer can offer.
Do not ignore the letter and do not cancel in a hurry. If you leave, you start again at your current age with a new health check. Ask an independent consultant to compare the tariff options before you decide.
Market context
We limit market totals to those published by the association of private health insurers (Verband der Privaten Krankenversicherung). According to its press release of 10 June 2026:
- Premium income of the private health and care insurers was EUR 54.9 billion (health insurance EUR 48.6 billion, private long-term care EUR 6.3 billion).
- Ageing provisions were about EUR 357 billion, up 4.2%.
- There were 8.79 million people with full health cover, up 0.6%.
For the coming adjustments, the 2025 annual reports of Barmenia (p. 21) and Gothaer (p. 22) cite information from the association of private health insurers: for 2026, premiums could be adjusted for about 60% of people with full cover, by an average of about 13%. Treat this as an industry estimate from that source, not a forecast for your tariff. Averages hide wide spreads between tariffs, and the figure for you is the one in your letter.
What ten insurers report about their adjustments
The table summarises what each insurer says about premium adjustments in its latest annual report (2025) or, for ottonova, its solvency report. It is listed alphabetically and is not a ranking. These are the insurers' own statements. Most do not state an average adjustment percentage. We show no number when none is stated. Amounts are in euros as reported, and are not comparable between insurers of different size.
| Insurer | What the report says (2025) |
|---|---|
| Allianz | Premium income in full cover rose 7.7%, with adjustments for higher benefit spending named as the industry driver. EUR 12.9 million was taken from the performance-independent RfB to limit increases for insured people aged 65 and over. No company adjustment percentage stated. |
| AXA | Premium growth of 3.5% included a "moderate" adjustment in full and supplementary cover. EUR 233.8 million was withdrawn from the RfB to mitigate increases. For 2026 it expects an above-average adjustment. No percentage stated. |
| Barmenia | No Barmenia-specific percentage stated. EUR 96.4 million of RfB was used to limit or finance adjustments. |
| Continentale | Health-insurance premiums rose 10.7% to EUR 1,799.4 million, attributed to adjustments. EUR 153.7 million of RfB was used as one-off premiums to cushion them, and EUR 162.9 million was already earmarked to limit adjustments needed on 1 January 2026. The size of the increases is not stated. |
| Debeka | Earned premiums rose 17.8%, mainly from adjustments. For 1 January 2026 it reports increases for some large full-cover tariffs and for compulsory long-term care. No percentage stated. |
| DKV | Gross premiums rose 5.9%, driven by adjustments in health insurance. EUR 287.8 million of limitation funds from the RfB was used (2024: EUR 349.1 million). No adjustment percentage stated. |
| Gothaer | No Gothaer-specific percentage stated. EUR 44.0 million of RfB was used to limit adjustments and to cut premiums in old age. It says high health-sector inflation clearly affects its adjustment of 1 January 2026, which together with new business drives premium growth. |
| Hallesche | EUR 90.6 million of RfB funds (2024: EUR 106.2 million) was used as one-off premiums to limit adjustments permanently in full and supplementary cover. No adjustment in compulsory long-term care in 2025. Its expected 9.3% premium growth for 2026 is a growth forecast, not an adjustment rate. |
| HanseMerkur | Customers were told in November 2025 of increases from 1 January 2026, citing inpatient care and medicines, and care reforms for long-term care. EUR 66.0 million of RfB was used to limit them. Premiums were reduced for 8,200 insured people on 1 January 2026. No percentage stated. |
| ottonova | Its solvency report (SFCR 2025) says rising costs can be compensated by a premium adjustment and that rising premiums are expected for full and supplementary products. No quantified 2025 adjustment stated. |
| Signal Iduna | In its own words, its 2025 adjustment was "very low" and clearly below the market average, with a 10-year average increase of 3.1% (the company's own claim). For 1 January 2026 it reports an adjustment "on average clearly above the previous year". No concrete 2025 or 2026 percentage found. |
For balance-sheet figures behind the buffers, see our insurer financials comparison.
Increases are per tariff, not per company. A company-level statement says little about the tariff you would hold. Ask for the increase history of that exact tariff, ideally over 10 to 15 years, before you sign. Our best-insurers guide lists what else to check.
FAQ
Why do private health insurance premiums increase in Germany?
Can my insurer raise my premium whenever it wants?
Is there a legal cap on how much a premium can rise?
Why do premiums rise in jumps instead of every year?
What can I do if my premium rises sharply?
Does my employer pay part of a premium increase?
Is the Standardtarif still available?
Which insurer has the lowest premium increases?
Sources
Legal texts checked on gesetze-im-internet.de on 16 October 2026. This guide is general information, not legal advice.
- Premium adjustment, trustee, notice period: §203 VVG
- Tariff switch and credited ageing provisions: §204 VVG
- Substitutive health insurance, life-insurance basis: §146 VAG
- 10% surcharge: §149 VAG
- Credit to ageing provisions, use from age 65, RfB for older insured: §150 VAG
- Profit participation, performance-linked RfB: §151 VAG
- Basistarif: §152 VAG
- Premium changes, 10% and 5% thresholds, trustee: §155 VAG
- Ordinance authorisation: §160 VAG
- Calculation interest cap: §4 KVAV; recalculation at adjustment: §11 KVAV; comparisons: §15 KVAV, §16 KVAV
- Ageing provisions in the accounts: §341f HGB
- Employer subsidy: §257 SGB V; Standardtarif conversion: §403 SGB V
- Market totals (premium income, ageing provisions, insured people), 10 June 2026: Verband der Privaten Krankenversicherung, press release
- Market net investment return 2.8% (2025, column "Branche"): Debeka annual report 2025, PDF p. 16
- 2026 expectation citing the association of private health insurers: Barmenia annual report 2025, p. 21; Gothaer annual report 2025, p. 22
- Insurer statements on adjustments (2025 annual reports): Allianz, AXA, Debeka, DKV, Signal Iduna, HanseMerkur (file name says 2024, content is the 2025 report), Barmenia, Gothaer, Continentale, Hallesche, ottonova (SFCR 2025)
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