Help regarding life insurance policies

The revocation of a life insurance policy – Get thousands euros by revocation

Millions of consumers in Germany have the unique chance to withdraw tens of thousands of euros from a life insurance policy. With our net and double bottom, without lazy tricks, legally perfect and clean. Background: Life or pension insurance policies taken out between July 29, 1994 and December 31, 2007 can often still be reversed because they contain incorrect cancellation of objection instructions. All details at one glance…

insurance companies have not or incorrectly informed their customers about their right of objection or withdrawal. In these cases, insurance customers can successfully object to the contracts. A successful objection or also withdrawal leads to the rescission of the contract. The insured persons receive the paid-in contributions back and additionally receive a compensation for use. The insurance company may deduct certain costs for consideration.

Customers should do the following things when revoking the contract

Check whether the contract contains instructions on how to object. If yes: Is this correct? Check the interest of the contract. Help24 will respond within 48 hours. Use the online calculator to calculate the usage fee. If you can count on a lot of money for a successful revocation, please contact Help24 immediately. If the insurer rejects the objection, the following options are available for you:

Contact the ombudsman, a lawyer or even better, Help24. Why do I have to cancel a life insurance policy?

The performance of countless life insurance policies and private pension schemes have been disappointing in recent years. The guaranteed interest rate and policyholder bonuses have fallen steadily. As a result, the development of most contracts is, unfortunately behind the expectations and projections on conclusion of the contracts. In addition ever-lower interest rates, the high costs of concluding and managing contracts are a decisive factor.

Moreover, around 50 percent of life and pension insurance policies are not maintained until the end of the contract term, I.e. in some cases terminated long before the end of the contract. However, termination is not recommended due to high cancellation costs. Far more lucrative are the revocation and, if successful, the resulting rescission of the contract.

The Federal Court of Justice (BGH) has repeatedly ruled that many insurance customers can object to their contracts. Reason: As soon as the insurer did not or incorrectly instruct the customer to withdraw from the contract when the contract was concluded, the customer can often still withdraw from the contract today, I.e. process it back. For example, the Federal Court of Justice on 7 May 2014 (file number: IV ZR 76/11) and on July 2015 (Act: IV ZR 384/14, IV ZR 448/14).

Which contracts are affected?

This affects life and private pension insurance policies, which have been concluded between 29 July 1994 and 31 December 2007 according to the so-called policy model. Specifically: If the insurance company has not provided the customer with all the necessary information before and during the application, the contract is concluded according to the policy model.

This applies to life and private pension insurance as well as unit-linked policies. Subsidized Riester contracts and Rürüp contracts (basic pension). Please note: Riester fund savings plans and Riester bank saving plans are not affected, because they were generally not conceded via an insurer.

What has to be observed with current and terminated contracts? There is no difference. Contracts  that have already been terminated or are still running can be reversed by means of an objection.

Attention in the case of disability and term life insurance

The contradiction is early successful and does not make sense. The contracts contain important insurance cover, which is usually to remain in place. For this reason, only a comparatively small proportion is accounted to the savings portion of premiums. The same applies to term life insurance policies.

The main criteria of the application model

If all the necessary conditions of the insurance and the legally relevant information for the customer were already known when the application was submitted, this is the application model. Here the consumer has a right of withdrawal and not a right of objection. A formality, because the result is identical in the event of success. The decisive factor is whether or not an insurance company has legally instructed the customer correctly.

Concrete example: If the instruction on the right of objection has not been sufficiently emphasized from printing point of view, this was and is an error of form. As a result, the 30-day period of rescission does not begin to run. In this regard, the Federal Court of Justice ruled by the supreme court on 17 December 2014 (ACT: IV ZR 260/11) and judgement of 25 January 2017 (File No: IV ZR 173/15). As a result, there is an eternal right to rescission, even today, years after the conclusion of the contract.

The differences between revocation and reversal:

For contracts concluded between 29 July 1994 and 31 December 2007, there was one special future: The insurance customer usually concluded his contract according to the application model. This was also the case if the insurer had provided the customer with all essential information only after the contract had been concluded. This includes the insurance policy, the General Insurance Conditions (GCI) and the information for the customer.

A 14-day right of objection for the customer case. This period was extended to 30 days from 8 December 2004. This period begins only after the documents of the contract are completely available for the customer. In principle, the customer had to be informed clearly and in writing on delivery of the insurance policy with regard to his right of objection, the start of the period and the duration of the period.

If the instruction by the insurance company was not given or was not given properly, the right of objection expired at the latest one year after the payment of the first premium to the insurer (according to §5a paragraph 2 sentence 4 VVG old). According to the current case law of the BGH (Federal Court of Justice), the one-year period no longer applies. Consequence: The customer has a so-called perpetual right of objection. Of course, this does only apply when the insurer has not instructed him sufficiently and legally correct.

Whoever has received no or no correct instruction on revocation or incomplete documents from the insurance company can still withdraw today from his old contract or object it. According to consumer protection advocates, the chances of success. Between 1994 and 2007, for example, more than 60 percent of teachings, as they say among customer protection groups, were false and thus ineffective.

Is reversal also possible after termination?

Termination of a current insurance contract does not mean complete termination of the contract. Rather, it becomes a termination agreement. This still exists, albeit in modified form. This also applies to the right of revocation contained therein. A life insurance policy that has already been terminated can therefore be revoked retrospectively.

Error to the contradiction/revocation

The BGH made its first decision in 2014, followed by two further decisions in 2015, all three in favor to the policyholders. A decision of the Federal Court of Justice, the highest German civil court to a certain legal problem usually has a far-reaching effect, because practically all state and higher regional courts as lower instances have to pay attention to those decisions and follow them. For good reasons, the disputes over the appeal of life insurance policies reached the Federal Court of Justice: Two legal provisions overlapped. Regional and higher regional courts decided one after the other.

One of these laws was §5a of the Insurance Contract Act (VVG). This was revised on 1st January 2008, so that the discrepancy with the second applicable legal basis no longer exists. However, §5a Veg old (old version) still applies to life insurance policies concluded before 1.1.2008.

This paragraph is in contrast to the European Council Directive (92/96/EEC) of 10 November 1992 on coordination of laws, regulations and administrative provisions relating to direct life insurances. The BGH ruled several times that the European regulation has to be applied, since European law is above German law. In contrast to §5a VVG old version, the European Directive does not provide for such a time limit. The BGH thus strengthened the rights of policyholders and consumers in general. Although the actual period for an objection had elapsed 14 days after the conclusion of the contract, many policies still have the right of objection. The European Court of Justice and Federal Court of Justice had ruled in 2014 and 2015 that the consumers concerned had an unlimited right of withdrawal.

You should pay attention to these errors

In principle, the insurer must prove that he has sufficiently instructed the customer and made all documents available for him. Consequence: if you believe that you have not been instructed and have not received any documents, the insurance is in the burden of proof. Important: In the policy model, documents were generally sent by post without verification or handed over in person against signature. Moreover, a deep look at the documents can be worthwhile. Because erroneous instructions on the contradiction can often occur.

Revocation: These are typical teaching errors

Dispatch of the objection: The instruction does not contain the information that the objection is sufficient within a period of 30 days (14 days for conclusion before 8.12.2004). The mail withe the revocation does not have to arrive at the insurance company within this time. A timely dispatch is sufficient. Text or written form: For contracts from 2002 onwards, the text form must be expressly stated in the instruction. If the written form is required for the opposition, this is not valid and it is an error. For example, an e-mail form 2002 onwards is also considered a possible form of objection. The Federal Court of Justice ruled on this matter on 14 October 2015.

Printing emphasis: The instruction must be clearly emphasized and must be different from the rest of the text. If not, this is considered to be incorrect. Thus the Federal Court of Justice on 24.2.2016

Important: The right of rescission also applies to insurance contracts that have already been terminated. Even if you as a customer have received a surrender value, you can still claim money if the proceeds from the surrender value exceeds the surrender value.

“Revoke“ or “Contradict“ – what is correct?

In this context, the terms “revocation“ and “contradiction“ are often confused. These words have basically an identical legal meaning. While “revocation is more of an umbrella term – the right of revocation is not limited to insurance – “contradiction“ can be used specifically in insurance law.

These are the benefits of a revocation

With the revocation and the successful reversal you can leave your expensive life insurance and save a lot of money. If you want to turn your insurance into cash prematurely, the revocation also makes sense. Termination would often be too expensive. In the event of a revocation, the insurance will be completely reversed. As an insurance customer, you will then not only receive your entire paid-in premium back, the insurer will also have to pay you compensation for use. This is an annual interest rate of 4 to 7 percent for the money received, with which the insurer has been able to work to date.

Why revocation is better and more lucrative than termination

It hardly ever makes sense to terminate a life insurance policy. Simple reason: The surrender value that you receive after termination is often – in some cases significantly – lower than the amounts previously paid in. In the event of a successful objection and the subsequent reversal, the insurance company must place you as the customer as if the insurance contract had never existed. You will receive almost all contributions paid back, plus compensation for use.

A revocation and reversal can be so lucrative for you

With his successful revocation the insurance customer gets all his contributions back. In addition, he may demand compensation for use, as the insurer has used the customer’s money. As a customer, you can generally receive an attractive interest rate for this, which is in most cases higher than the return on your life insurance or private pension insurance achieved to date.

In the course of the legal dispute, you as the customer must prove that the insurance company has actually used the money provided. The Federal Court of Justice is not of the opinion that an insurance company does not make a profit in the amount of the statutory interest rate provided (judgement of 11.11.15): According to the BGH, for example, an interest rate of 5 percent above the usual base interest rate (§288 BGB) can not simply be applied and demanded.

The insurance company does not have to pay any compensation for use for the contribution attributable to the risk share and the acquisition and administration costs, which is also stated by the Federal Court of Justice (judgement 10.02.16, file number: IV ZR 19/15). Only in the case of administrative costs, the insurance company may have to pay compensation for use. The insurance customer has to prove this, which is usually quite difficult.

Incidentally, the Higher Regional Court (OLG) of Stuttgart studied annual reports and assumed an average interest rate of 4.ß2 percent over all years as an example. The court estimated the compensation for use at 3,500 euros (23.10.14, file number: 7 U 54/14).