Early termination of the VL contract

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Capital-forming benefits are intended to offer the employee savings benefits. For this purpose, the legislature has provided bonuses so that the saver can more easily achieve his goal. Many companies also offer their employees the option of participating in the amount stipulated by law. It is therefore difficult to prematurely terminate your VL contract. If you intend to terminate your VL contract early, you should think twice beforehand.

VL contract pays interest, cents don't save.
VL contract pays interest, cents don't save.

What you need:

  • a good overview
  • good advice

Dissolve VL contract - brings losses

Find out for yourself the reason why you want to terminate your VL contract early. If the trigger is a financial bottleneck, you should not act hastily or hastily.

  • The money you have paid in yourself is usually only retained with the VL contract with a building society.
  • The currently valid sales index always applies to funds.
  • In the case of life insurance, the surrender value applies.
  • You will certainly have to reckon with losses if you terminate the VL contract prematurely.
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  • Then the premiums have to be paid back to the employer and the state. This is automatically returned to the sender immediately from the sum.

Get advice ahead of time - avoid mistakes

If you have received tax benefits, the responsible tax office will invoice you for them.

  • It is better not to cancel the VL contract prematurely.
  • Talk to the company that offers you your savings option. Let us advise you and find a solution.
  • You can let the VL contract rest until the financial crisis is over. Even if you never pay in again, it is cheaper to leave the VL contract in place than to terminate the VL contract prematurely.
  • If - for whatever reason - the monthly savings amount is too high for you, then leave out your share.
  • With many forms of VL contracts, the amount from your employer is sufficient. If this is not possible with your VL contract, please speak to your tax advisor or the income tax aid association.
  • They will advise you that you may receive an allowance on your tax card. This would give you more net monthly than before. Then the contribution to the VL contract no longer hurts so much.

Canceling early - not always the best solution

If you need cash quickly, it would be better to speak to your bank about a loan than to terminate the VL contract early. In the best case, the VL contract is accepted as security.

  • Building societies in particular can also react generously if you have made your monthly payments up to now.
  • Building societies will then be happy to provide an amount at low interest rates.
  • There are many ways to really get more money, to terminate the VL contract should the last one be.

This article is not intended to provide legal or tax advice.

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