Kapitallebens

Kapitallebensversicherung, commonly abbreviated Kapitallebens, is a life insurance product that combines risk protection with a savings component. The policy pays a death benefit to beneficiaries if the insured dies during the term, and at maturity may provide a lump-sum capital payoff to the insured if they survive. The policy accumulates capital through regular premiums, part of which covers the risk premium and the rest is invested by the insurer to build a guaranteed component plus potential profits (überschussbeteiligung).

The typical contract specifies a guaranteed minimum interest on the savings portion, plus a discretionary surplus depending on the insurer’s performance. The policy may include a surrender value if terminated early; early cancellation or switching can incur penalties or loss of guaranteed benefits. At maturity, the policy can pay out a capital sum; in many markets it also provides a death benefit if the insured dies before maturity.

Historical context: It became a popular long-term savings product in the 20th century in German-speaking Europe, often marketed as a combined protection and savings vehicle. With sustained low interest rates and a greater focus on cost transparency, its relative appeal has declined; many products have faced criticism for high fees, complexity, and relatively modest real returns.

Regulation and alternatives: In many jurisdictions, capital life policies are subject to insurance law and tax rules; policyholder protections and disclosures have expanded in response to consumer concerns. Alternatives include term life insurance with separate investment products, or unit-linked (fondsgebundene) policies that expose the savings to market risk but may offer higher potential returns.