Acquisition costs: what the broker commission costs the insured

Acquisition costs are split into direct costs, meaning the commission and direct sales expenses, and indirect costs such as advertising, application review, health questions and policy issuance. They arise once when the contract is concluded and are calculated from the first day for the entire term.

Supervisory law sets the framework. § 50 VAG caps the acquisition commission in substitutive health insurance at the equivalent of around nine monthly premiums. § 49 VAG obliges the intermediary to pay back a share if the contract ends in the first five years. Six to seven monthly premiums are common, based on the agreed first premium. This value is the industry standard and not the result of negotiation by the individual broker. The commission does not appear on the ongoing premium invoice. However, the insurer must show the acquisition costs included in its calculation before the contract is concluded, in the product information required by the VVG information regulation. For a sense of scale in the industry: according to Map-Report analyses, the acquisition cost ratio of private health insurers is around six to seven percent of premium income.

In private health insurance, the customer pays no separate broker commission when taking out the contract. The insurer pays the intermediary, and this payment is part of the company's general cost calculation. What matters here: the premium is not automatically higher just because the contract is concluded through a broker. Direct sales, online marketing, telephone advice and internal sales structures also cause costs.

Frequent changes of insurer should still be considered carefully. The reason is not double acquisition costs. When you switch to a new provider, other economic factors play a role: a new entry age, new health questions, possible risk surcharges, changed plan benefits and the question of which share of the ageing reserves can actually be transferred.

Customers do not pay a separate acquisition fee when they take out the contract. The premium results from the plan calculation of the insurer and is in principle not higher just because the contract is concluded through an intermediary. Still, the assumption persists that buying directly is automatically cheaper because no intermediary is involved. That is not true. Direct sales also cause costs, for example for online marketing, advice, administration or telephone support.

The difference therefore does not lie in whether costs arise, but in how the process of advice and taking out the contract is organized. What matters most is who compares the plans, prepares your health information properly, supports risk enquiries and helps later with benefit questions or plan changes.

With fee-based advice, the customer pays for the advice directly. Unlike in parts of life insurance, however, there are practically no classic net plans in private health insurance without a built-in acquisition payment. This means that a fee in private health insurance does not automatically lead to a lower monthly premium.

What matters is therefore less the way the advisor is paid and more the quality of the advice. Which insurers are checked? How carefully is your health information prepared? Is an anonymous risk enquiry carried out in advance? And how good is the support later with benefit questions, premium adjustments or plan changes? Whether advice is paid by fee or by commission says nothing on its own about the quality of the recommendation. What is important is that payment, scope of advice and market selection are disclosed transparently.

The question of what a broker actually costs is one of the most frequent in our advice work, and the answer surprises many people. Customers who take out a contract through a broker pay no separate invoice. The insurance company pays the broker in the form of a commission.

More important than the pure level of payment is therefore the question of what service is provided for it. A good private health insurance broker does not only check premiums. The broker prepares your health information properly, carries out anonymous risk enquiries, compares plan terms and also supports you after the contract is signed with benefit questions, premium adjustments or plan changes. Before signing, interested people should therefore ask not only about the commission but also about the scope of advice.

Customers pay no separate invoice for advice and arranging the contract. The broker is paid through a commission from the insurance company. As a result, the premium is not higher than when you buy directly from the insurer.

No. Direct sales also cause costs, for example for online marketing, internal advice, administration and telephone support. The difference therefore lies less in the price and more in who supports the customer through the selection and application process.

What matters is not only the payment but the actual scope of advice. A good broker checks plans, prepares your health information properly, supports risk enquiries and is there for you after the contract is signed with benefit questions, premium adjustments or plan changes.