You have to take out insurance in advance. You sign a contract and pay money to the insurance company either monthly or annually.

Some types of insurance are compulsory in Germany: you are required by law to have them. They are governed by certain rules. Other types of insurance are optional: you can take out insurance if you want to.

Germany has a good social insurance system. If you are an employee, you pay into the social insurance scheme. Read the “Starting work” section for more details. Your contribution towards this insurance is deducted from your wages. You don’t have to cover all the costs on your own – your employer pays half. The amount you pay depends on your wages. The more you earn, the more you pay towards the insurance. The less you earn, you less you pay. This system ensures that people with low incomes also have insurance coverage.

Social insurance includes statutory health insurance, statutory long-term care insurance, statutory accident insurance, statutory pension insurance and statutory unemployment insurance. These insurance schemes provide equal coverage for everyone. Regardless of how much individuals can pay, everyone receives the same benefits.

If you’re self-employed, in other words, if you have your own business, you do not pay into the statutory social insurance scheme. You have to insure yourself. People without a job or those with a mini-job do not pay social insurance.

Health insurance is compulsory for everyone in Germany. It covers the costs if you see a doctor, go to hospital or need medication. There are two types of health insurance: statutory and private. If you are an employee, you are usually covered by statutory health insurance. Under this system, your children are also insured at no extra charge. This also applies to your husband or wife if he or she does not work or earns very little.

Self-employed people can choose whether to be insured through the statutory health insurance system, or through a private health insurance company. Employees in certain professions, such as teachers, may also have private health insurance. Private health insurance is usually only advisable for individuals with a higher income.

You will receive a health insurance card from your health insurance fund. Remember to take this with you when you see a doctor.

If you lose your job or have not yet found a new one, you will receive unemployment benefit. The amount and duration of benefits depend on several factors, such as how long you have worked and how much you earned. However, you will only receive benefits if you are eligible.

Pension insurance is also compulsory for employees. In older age, when you no longer work, pension insurance provides you with money to live on.

Employees are also covered by accident insurance. This is paid if you have an accident at work or become ill because of work.

Long-time care insurance is paid if you need long-term care. This is most commonly needed by older people, but it can also apply to young people, for example, after a serious accident.

None of these types of insurance are compulsory for the self-employed. Self-employed persons are not required to have these types of insurance, however they can take them out if they want to.

If you have a car or motorbike, you need vehicle insurance. If you have an accident or damage another car, your vehicle insurance will pay for the repair or part of the repair.

The most important types of optional insurance are personal liability insurance and occupational disability insurance. If you break something belonging to another person, this can be very expensive. In such cases, a liability insurance pays for the damage. The insurance itself does not cost much.

If you have a dog, you should take out liability insurance for your dog.

Occupational disability insurance works as follows: If you become seriously ill and are no longer able to work, you won’t receive your regular wages. This can lead to serious financial hardship. In such situations, occupational disability insurance pays you money every month. However, this type of insurance can be costly. The higher the premiums, the greater the benefits you will receive. The lower your premiums, the lower the benefits.

Household contents insurance and life insurance may also be advisable. Household contents insurance covers the costs of damage to items in your home, such as in the case of water damage. Life insurance provides a payout when you die. Your children, for example, then receive the money.

Statutory pension insurance does not always pay very much. Private pension insurance options are also available. Additional pension coverage is important if you want to maintain a good standard of living in old age. The government supports some of these private insurance schemes.

There are many other types of insurance that may be useful for you depending on your personal circumstances. However, it’s important to carefully check which ones you really need, because insurance can be costly. Private accident insurance provides coverage in the event of an accident during your leisure time. Legal expenses insurance covers the costs of consulting a lawyer.

Insurance is also available for travel, dental care, glasses, loans and mobile phones. Consider how big the risk is and decide whether you can pay for many things yourself. You don’t necessarily need additional insurance.