Insurance is a legal scam
Court judgments for endowment life insurance (surrender value ...)
On July 26, 2005, the Federal Constitutional Court ruled under file numbers 1 BvR 782/94 and 957/96 after a negotiation period of 10 years.
The convicted life insurance companies have built up considerable hidden reserves in the past. This was done, for example, through depreciation on various assets such as real estate and shares - acquired from customer funds.
Without comprehensible reasons recognizable for the policyholder, the insurance companies then have all insurance contracts with the approval of the Federal Supervisory Office on one newly founded Transfer to society (without asking the insured). The insured were then given the "economic equivalent" of their claims - but the hidden reserves remained with the respective insurer.
In the case of the German Herald alone, according to the court, the misappropriated funds amounted to at least 350 million DM. The Federal Constitutional Court then rightly comes to the conclusion that this practice is unconstitutional and prohibited the insurance companies to continue this practice.
However, in an incomprehensible manner, the court then stated that it cannot be assumed that the customers still have an interest in the Retransfer who had misappropriated funds in the past. In addition, this would involve considerable administrative effort, which, due to the expected error rates, cannot be expected of the parties involved.
Another constitutionally objectionable problem was found in the fact that so-called "cross-accounting" is also not restricted by law. A poor risk history, in the form of an unexpectedly high mortality rate, can adversely affect the insurer's operating profit from the risk component.
A Cross-accounting occurs when losses 'earned' through a bad risk profile are filled by the result actually attributable to the savings portion.
In simple terms, this means: With a monthly fee of € 100, for example, € 15 is allocated to the risk component. The remainder - the so-called savings portion of € 85 - is invested with interest (other costs are not taken into account). If the company has miscalculated and the risk costs are, for example, € 30, the "earned" loss of € 15 is taken from the savings portion by cross-accounting.
In this example, only € 70 are invested with interest. Since your deposited money is not held in trust, so must costs not adhered to become. In the following file you will get a little insight into the enormously fluctuating costs, which are probably caused by such "cross-calculations". Non-guaranteed costs [pdf]
At least the legislature was required to find a legal regulation by the end of 2007, which makes it impossible for the insurance companies so easy to enrich customer money. This regulation was implemented from 01.01.2008 with the reform of the Insurance Contract Act.
In our view, however, endowment and private annuity insurances are, despite all legal regulationsin no way recommendable. A large part of our website is therefore dedicated to this topic. You can find the most important information about this under the following link. to the article "Endowment life insurance"
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