Residual debt insurance: Transparent and inexpensive possible

A study by Stiftung Warentest on residual debt insurance has produced many negative results. Since the summer, many residual credit insurers have only made a voluntary commitment to improve their products. The customers who buy the policies through the banks do not seem to get it. Therefore, the consumer advocates are now calling for a commission cap again.

“The insurance conditions often contain surprising restrictions and the credit protection is bought very dearly,” said Stiftung Warentest on the occasion of an examination of the residual debt insurance of 25 banks. Only when it comes to death protection did three quarters (18) of the banks achieve very good results and six banks good results. In contrast, the testers rate the results for the protection of incapacity for work as “shockingly bad”.

Abstract reference criticized

15 of 25 banks examined did not perform well here. Here many insurers behind the banks would use the “abstract referral” known from occupational disability. This would unduly disadvantage consumers. The Hamm Higher Regional Court (I-20 W 12/12) had already determined this in 2012. But there is another way, as the consumer advocates state. According to the tester, the Santander Consumer Bank (risk taker: CNP Santander Insurance Life) and Süd-West-Kreditbank Finance (SWK Bank; Rhineland Insurance) secure the inability to work as “very good”.

Practice: cheap and good is possible

Insurance broker Achim Hertel from Cologne has also been working with the conditions of Rheinland Versicherung for years. The costs are also transparent, because the broker offers residual debt insurance on the basis of net policies and only charges a service fee. Insurance magazine already pointed this out in 2018 (residual debt insurance: small broker dupes banks). The insurance broker is also currently advertising that its offer is “50 percent cheaper than the original price”.

Commission cover required

In contrast, Dorothea Mohn, head of the financial market team at the Federation of German Consumer Organizations (vzbv), accuses the banks of receiving more than 50 percent of the insurance premium as commissions in some cases. According to Stiftung Warentest, this is also the reason why the prices for residual debt insurance would fluctuate so strongly. Using the example of Deutsche Skatbank, the testers calculate how much the effective interest rate changes if the insurance company were to be included. “For the installment loan of 10,000 euros over 60 months, the bank charges an effective annual interest rate of 2.89 percent without insurance. The monthly loan installment is 182 euros. If the borrower protects his death, the actual interest increases to 5.12 percent and the Rate by ten to 192 euros. The insurance costs a rounded total of 531 euros. With coverage of all three risks, the loan rate quadruples to 12.30 percent, the rate rises to 224 euros. The insurance costs a total of 2280 euros. “

As before, the annual percentage rate cannot be used, according to the consumer advocates. Because banks would not have to include the cost of residual debt insurance in the effective annual interest rate on the loan, provided that the conclusion is voluntary. According to their own statements, this is the case with all of the banks examined. According to the Federal Financial Supervisory Authority, the indication of the voluntary nature of the contract is present, but so inconspicuous that it is often overlooked.

Transparency does not reach the consumer

The central concern of the 25 residual credit insurers, who have committed themselves to higher product quality since July 1, 2020 under the umbrella of the General Association of the German Insurance Industry (GDV), is a high level of transparency. It says in point 2. “Customer-friendly documents”: The focus is on the comprehensibility of the product for the customer. The documents on the RKV are designed accordingly. “The Stiftung Warentest has now proven that this transparency apparently does not reach the consumers via the banks. There are advisory deficits here, the foundation concludes. Because if the banks were to provide full information, many consumers would Avoid protection.

Author (s): Uwe Schmidt-Kasparek

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