Cancelling or revoking life insurance
Cancelling or revoking a life insurance policy – your rights in Augsburg
You want to cancel your life insurance policy – but cancelling is often the worst option. The surrender value is usually far below the premiums paid, and many insurers deduct a cancellation fee which, according to Federal Court of Justice (BGH) case law, may be invalid. Policyholders can receive significantly more money by exercising their right of revocation: anyone who took out a life insurance policy under the policy model between 1994 and 2007 and was incorrectly advised about their right of revocation can still rescind the contract today. As specialist solicitors for insurance law in Augsburg, we will assess which option is the most financially advantageous for you.
Termination or cancellation – the difference amounts to thousands of euros
Anyone who cancels their life insurance policy receives the surrender value. In the early years in particular, this is significantly lower than the premiums paid, as acquisition and administrative costs are deducted first (Zillmerisation). In addition, many insurers apply a cancellation charge. In the case of rescission, however, the contract is reversed: the insurer must refund all premiums paid, minus the risk component and reasonable administrative costs – plus the interest earned on your money. For long-term contracts, the difference between cancellation and rescission is regularly several thousand euros.
Refund following cancellation – this is how much money you are entitled to
A successful revocation (Widerruf) leads to the full unwinding of the contract. In the event of a successful unwinding, the insurer generally has to reimburse the savings portion of the premiums paid plus the benefits it derived from your capital. Only the risk portion for the insurance cover actually used and reasonable administrative costs are deducted. How high the refundable amount is depends on the specific contract; it is often, but not necessarily, higher than the surrender value paid on a mere cancellation.
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Life Insurance Review
Check whether your life insurance policy is affected by the ‘revocation clause’ – and how much money you are entitled to.
Which contracts are affected – an overview
The Widerrufsjoker mainly concerns life insurance policies taken out under the policy model (Policenmodell) between 1994 and 2007; these older contracts are not affected by the legal change of 19 June 2026. The cancellation notice (Widerrufsbelehrung) can also be defective in more recent contracts – for contracts concluded on or after 19 June 2026, however, a statutory maximum period of 24 months and 30 days after conclusion of the contract applies (§ 152 VVG); the right of revocation then remains unlimited in time only where no notice, or a defective notice, was given about the right of revocation itself. In Augsburg we review every contract individually – regardless of the type of insurance.
Traditional endowment and unit-linked life insurance policies
In the case of endowment policies and unit-linked life insurance policies, cancellation is particularly attractive from a financial perspective because high premiums have been paid over decades and the surrender value regularly falls far short of the premiums paid, due to zillmerisation and surrender charges. Reversing the policy often yields five-figure sums more than a simple cancellation. The same applies to private pension insurance policies in the deferral phase.
Riester, Rürup and workplace pension schemes
Riester pensions, Rürup pensions (basic pensions) and occupational pension schemes (direct insurance, pension funds, pension schemes) may also be affected by the ‘cancellation option’. However, there are specific considerations: in the case of Riester and Rürup pensions, state subsidies and tax benefits must be repaid, which reduces the financial benefit. For occupational pension schemes, the possibility of cancellation depends on the implementation method and on who the policyholder is. In Augsburg, we calculate for each type of contract whether cancellation makes financial sense.
This is how we review your life insurance policy in Augsburg
Determining whether cancellation or a claim for repayment is possible following termination requires specialist knowledge of insurance law. In Augsburg, we systematically analyse your contract documents and calculate the most cost-effective course of action.
Review of the cancellation policy and contract documents
We will check your policy, the accompanying letter and the cancellation policy for formal errors. Common defects include: incorrect time limits, missing information on the form of withdrawal, insufficient details of the legal consequences, or failure to provide the insurance terms and conditions and consumer information in accordance with Section 10a of the Insurance Supervision Act (VAG) (old version). Even a single error is sufficient to mean that the withdrawal period has never commenced.
Out-of-court enforcement and legal action
Once we have reviewed the case, we will notify the insurer of the cancellation and demand that the contract be rescinded. Many insurers pay up following a formal demand from a solicitor or settle out of court to avoid litigation. If the insurer refuses, we will bring your claim before the competent regional court. In life insurance disputes, the value of the claim is usually over €5,000, meaning the regional court has jurisdiction. The success rate for thoroughly examined cases is high.
Frequently Asked Questions
Further information
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This information does not constitute legal advice in individual cases.
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