Many people have taken out endowment insurance as a retirement provision. But the payout is often a disappointment in old age: The amount can be significantly less than the insurer had promised. One reason: many insurers are in crisis – according to a recent study, 22 out of 84 companies examined have major financial problems.
Reasons for lower payouts
There can be several reasons why the payout of an endowment policy is often lower than expected:
Life insurance policies consist of two elements: On the one hand, customers insure themselves against the risk of death; on the other, they save 
capital with the monthly premium. Many overlook the fact that interest is only paid on the capital saved.
In addition to the fixed guaranteed interest rate, a life insurance policy has a so-called profit participation, which gives the customer a share of the earnings. The amount of the profit participation depends on how well the insurer performs.
Life insurance policies are subject to high costs, such as commissions for agents and administration costs during the term of the policy. This also reduces the return.
Economies have been stuck in a low-interest phase for many years. Hardly any interest is paid on money lent out. This also affects insurance companies, which can therefore earn less.
Many insurers have promised excessively high interest rates. In old contracts, guaranteed interest rates of up to four percent were fixed. In order to be able to pay the guaranteed interest rate, life insurers save up a so-called additional interest reserve. This money is no longer available for profit participation.
If an insurance company becomes insolvent, the “Protektor” protective shield kicks in. This protects the guaranteed interest and already promised surpluses.
Insolvency: Which insurance companies are at risk?
Studies by the German Federal Financial Supervisory Authority (BaFin) and the Association of Insured Persons (BdV) show how solvent companies in the insurance industry are. BaFin has placed 20 of 84 companies examined under “intensive observation.” In 2019, the Bund der Versicherten rated the solvency of 22 insurance companies as critical.
Cancellation and reversal
Despite the poor situation of many insurers, consumer advocates advise against prematurely terminating a current life insurance policy. The financial damage may be greater than the benefit.
In some cases, insurers have written faulty clauses into the contracts. If, for example, the so-called contradiction instruction is wrong, customers can assert a claim for reversal of the entire contract.
Whether termination or reversal makes sense must be examined individually, for example by independent experts from the consumer advice center.
Optimizing life insurance
Those who want to keep their life insurance can reduce costs by making changes to the contract. Examples:
Accidental death supplementary insurance policies included in many life insurance policies are usually superfluous.
Those who have agreed to a regular automatic increase in the sum insured and thus also in the premiums can stop this so-called dynamic.
Those who pay the premium annually or semi-annually save the so-called installment surcharge for the monthly installments.
