If you're living and working in Germany, you're legally required to have health insurance. But what many international residents don't realise is that the type of insurance you choose can have a significant impact on your finances over time.
For higher earners, freelancers, and self-employed individuals, private health insurance can offer substantial savings compared to public coverage, while also providing better care. In this article, we'll explain how much you could actually save by switching from public to private health insurance and what would happen if you invested that extra money instead.
In Germany, public health insurance (Gesetzliche Krankenversicherung) contributions are based on your gross income. The current contribution structure is approximately the following:
| Component | Rate |
|---|---|
| Base health insurance | 14.6% |
| Additional contribution (varies by provider) | ~1.7% |
| Long-term care insurance | 3.4–4.0% (higher if childless, 23+) |
| Total | ~19.7–20.3% |
This total is split between you and your employer (each paying roughly half).
Contributions to the German state pension are capped at the income ceiling (Beitragsbemessungsgrenze) of €69,750 per year (2026). That means even if you earn more, your maximum monthly contribution is roughly €1,150–€1,200.
For employees, you typically pay about half of this, with your employer covering the rest. However, freelancers and self-employed workers pay the full amount themselves, so planning ahead is essential.
Unlike public health insurance, private health insurance (Private Krankenversicherung, PKV) premiums aren't based on your income. Instead, they're calculated based on:
For young, healthy individuals, this often means significantly lower monthly premiums than public insurance (even with comprehensive and better medical coverage).
| Situation | Public (GKV) | Private (PKV) | Monthly Savings |
|---|---|---|---|
| Employed (high earner) | ~€575/mo (your share) | ~€400–500/mo | €75–175 |
| Freelancer (full contribution) | ~€1,150/mo | ~€450–550/mo | €600–700 |
Freelancers and self-employed individuals see the biggest savings, since public insurance requires paying the full contribution themselves.
Instead of paying higher public insurance premiums, you could take that money difference and invest it in a way that fits your life in Germany.
Investing €200-€300 per month into a diversified portfolio over 20-30 years can create significant retirement income. With compound growth, even small monthly contributions can grow over time and add up to a significant increase for your pension.
Having 3-6 months of expenses set aside provides financial security and peace of mind.
Use your savings for professional development, like courses or certifications that increase your earning potential.
Private insurance premiums can increase with age. Setting aside savings now can help manage higher costs later.
If you're self-employed or freelance, the difference between public and private insurance costs really stands out:
As your income grows, public insurance costs rise proportionally (up to the cap). Private insurance premiums stay the same regardless of your earnings.
Private insurance can be a great option, but it's not the best fit for everyone. Think carefully if:
If private insurance makes sense for your situation, here's how to proceed:
1. Confirm your eligibility. You need to earn above €77,400/year or be self-employed/freelance.
2. Compare providers. Look at coverage, monthly premiums, and customer reputation to find the best fit.
3. Fill out your health information honestly. Any mistakes or omissions could lead to denied claims later.
4. Notify your current insurer. Follow their standard notice period so there are no gaps in coverage.
5. Inform your employer. If you’re employed, your employer will need to update your payroll and contributions.
For the right person, private health insurance in Germany can offer:
The key is understanding whether private health insurance fits your long-term plans, including family, career, and retirement considerations.
If you'd like a personalised comparison of your options, we're here to help you make an informed decision. Arrange a free consultation with us today, no strings attached!