Protection & safety · Jurisdiction DE

Payment protection insurance

Payment protection insurance is a contract of its own beside the loan. Whether the loan may depend on it follows the kind of credit.

In more detail

As of 1 January 2025, BaFin: for a general consumer loan, the conclusion may no longer depend on also taking out payment protection insurance. From the same day a waiting period applies: the insurance can be concluded at the earliest one week after the loan. For a mortgage consumer loan the firm may require the insurance, but must then include its cost in the APR. Finmon says yes or no to neither contract.

Background

Typical parts are named death, unemployment or incapacity for work. Whether an event pays is decided by waiting periods, exclusions and maximum periods in the conditions. The premium can make the financing more expensive. A consumer advice centre can read a specific offer. Finmon does not read it.

An example

In the loan conversation there is a form for payment protection insurance. The loan can also be concluded without that form. Whether the policy later pays on unemployment is in its conditions and not on the loan application alone.

A common misconception

Without payment protection insurance there is no consumer loan.

For a general consumer loan, the loan may not depend on this insurance since 1 January 2025. For a mortgage loan it can be required. Two kinds of credit, two rules.

Source: BaFin · Restschuldversicherung. Last reviewed: 2026-10-27. Editorially reviewed on 2026-10-27. Next review 2027-10-27. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.