Criticizes Retirement Using Life Insurance: BdV
In the world of life insurance, high cancellation rates are causing significant concern, particularly for long-term contracts designed for retirement provision. According to Axel Kleinlein, Chairman of the German Association of the Insured (BdV), retirement provision through life insurance is becoming a losing proposition for the majority.
Half of all life insurance customers in Germany cancel their contracts within 27 years, and two-thirds cancel within 43 years. These high cancellation rates, which accumulate year after year, are catastrophic for long-term contracts. The BdV argues that these rates indicate a need for insurers to re-evaluate their strategies and customer retention methods.
Life insurance products can be complex, with high fees and commissions, which may reduce the overall value to the consumer. Some critics also argue that life insurance products might not offer the flexibility needed by retirees, who may require more adaptable investment options. Investments linked to life insurance can also be exposed to market risks, which might not be suitable for all retirees.
Axel Kleinlein's association advocates for solutions without subsidizing the life insurance industry. Instead, they suggest alternative concepts such as pension funds and investment accounts, which offer transparent, low-cost investment options. They also advocate for stronger state support in pension systems to ensure a more stable income source for retirees. Hybrid models, combining elements of different retirement savings methods, are also proposed as a more comprehensive solution.
Axel Kleinlein has expressed concern that many consumers are pulling the emergency brake too late regarding retirement provision with life insurance. He suggests a concept of basic deposit retirement provision as an alternative. The BdV is against being forced into a specific retirement solution and believes in the importance of choosing an individually suitable solution for retirement provision.
The association chairman, Axel Kleinlein, claims that insurers are ignoring the high cancellation rates and glossing over the statistics. He suggests that this lack of transparency is causing consumers to make uninformed decisions about their retirement provision.
In conclusion, the high cancellation rates in life insurance in Germany have raised concerns about its suitability as a retirement provision method. The BdV advocates for alternative retirement provision concepts and emphasizes the importance of transparency and individual choice. If you're looking for specific arguments or proposals from the BdV, it's recommended to consult their official publications or contact them directly for more detailed insights.
After recognizing the high cancellation rates in life insurance, Axel Kleinlein suggests that insurers should reconsider their strategies and customer retention methods, taking into account the financial implications for personal-finance arrangements and business growth in the long-term. Additionally, considering alternative concepts such as pension funds and investment accounts might offer consumers a more transparent path towards personal-finance management and retirement provision, free from the complexities often associated with life insurance.
