Helma Sick: Is it worth buying a property?

Car insurance – fewer kilometers, more money?

Because of Corona, I was in the home office for a year. I usually commute to work, but I’ve hardly used the car this year. Does this affect car insurance? I didn’t even reach the kilometers on which the contract is based.

Yes! All you have to do is provide the insurance company with evidence of the current mileage, and the contract will be adjusted and the money may even be reimbursed.

Buying real estate – to own a home by usufruct?

I (62) work as a freelancer. When I retire, I receive around 200,000 euros from life insurance – unfortunately too little for a beautiful property in my city. What do you think of it when I’m looking for people who want to buy an apartment as an investment but don’t have enough money? I would give them my money, in exchange I would register the usufruct of the apartment and pay the housing benefit. A good idea?

I find it problematic to hand over all of your capital to strangers in order to live in their apartment. You do not know what else is in store for you and what you might still need the money for. What if you don’t want to live there in ten years? Or if you want to move into a senior citizens’ residence because you will be well looked after there until the end of your life? Will the remaining money be returned? In addition, our lawyer says: The idea is not recommended. On the one hand, the owners of the apartment would have to pay tax on the amount they paid like rental income, whereby the amount could be spread over a maximum of ten years. On the other hand, there are complicated regulations associated with usufruct that can lead to legal disputes. My advice: invest your money well and rent an apartment. Then you are free to decide if your needs should change.

Early retirement – inheritance as a pension?

I (55) plan to leave my job. I won’t get my pension for ten years. But I have a large sum from an inheritance that I want to use to bridge the gap until I retire. Whats the best way to do this?

You should divide your investments into one part, from which the withdrawals are made via a payout plan. Funds with less volatility can be used for this. So this part of the money will gradually be used up by your withdrawals. The other part must then be laid out “for growth”. This means, for example, in mixed funds with a small to medium share of shares, depending on the risk appetite. This money should then be available when the withdrawal fund is used up.

Life insurance – who is entitled to benefits?

My partner and I live together unmarried. He has a high level of life insurance, which says under “entitlement to benefits in the event of death”: “the parents”. Who will get the money if something happens to them?

His parents! If your partner wants to send you the money, he or she must change this with the insurance company and enter your full name and date of birth under “Eligibility”. Then there is no problem in an emergency.

Occupational disability insurance – conceal previous illnesses?

My 15 year old son has scoliosis, a curvature of the spine. I would like to take out disability insurance for him. But I was told that because of the scoliosis it wouldn’t work. However, if I do not state the illness, the insurance will not pay if my son becomes unable to work due to scoliosis. Now a consumer organization explained to me that the insurance must also pay for occupational disability due to scoliosis, even if this was not specified in the contract. The prerequisite is that the contract has run for ten years. Is that correct?

That is true, but it is a “pre-contractual breach of the duty to notify” if an existing illness is deliberately not stated when taking out the contract. And that has consequences: If your son becomes unable to work due to another illness within the next nine years, the insurance company can withdraw from the contract. Your son can take out occupational disability insurance (BU), but with the exclusion of scoliosis. This means that he can receive a BU pension for any type of illness that causes him to become incapacitated, except for incapacity due to scoliosis.

Funeral expenses – save now?

My mother is 71 and has been in a coma since a car accident. My father is overwhelmed with the situation. That’s why I took a look at my parents’ financial situation – and found with horror that there were hardly any financial reserves. In the event of my mother’s death, I would have to pay the funeral expenses. I don’t have any reserves worth mentioning either, which is why I’m considering setting up a fund savings plan that I pay into on a monthly basis. Is that disrespectful of me?

Not at all! I find it sensible and responsible to take precautions now for an emergency. Since the investment in mutual funds is not earmarked, you can use the saved capital for something else in the event that you do not have to pay for the costs.

Saving sensibly – the bad conscience

I (41) like to spend my money, but with a guilty conscience. I know I should save up. If I had started putting money aside ten years ago, I would already have a nice sum.

With “should” and “should” you get no further. It is like it is. Set yourself a goal (e.g. retirement provision or future property purchase) and just start – IMMEDIATELY. Equity funds, for example, are ideal if you want to build up wealth over the long term. You can get into most funds for as little as 25 euros per month. There are no upper limits. It would be ideal if you saved five, even better ten percent of your net income on a regular basis.

Life insurance – who is entitled to benefits?

I live in the Netherlands, worked in Germany and had private health insurance there. After my retirement, I also had to take out health insurance in the Netherlands. When I asked about the continuation of the private compulsory long-term care insurance, I was informed that the insurance would not be paid out abroad and would therefore expire. Is that correct?

Unfortunately, the information is correct. The private compulsory long-term care insurance in Germany ends automatically when the private health insurance in Germany ends. It is not possible to continue the contract as a private, voluntary long-term care insurance.

Helma Sick …

… runs the company “Frau und Geld” in Munich with Renate Fritz and is a successful book author.

Brigitte