The short answer is: For most new contracts, this is only possible to a limited extent, while for some older contracts it certainly is. That’s precisely why it’s not advisable to make blanket judgments about a life insurance policy as „good“ or „bad.“ The decisive factors are always the contract start date, the guaranteed interest rate, costs, the term, the tax treatment, and your actual goal .

Many people take out a whole life insurance policy because it combines two things: saving for the future and financial security in the event of death . At first glance, this sounds sensible. In practice, however, this combined product is often not the most efficient solution. Today, pure risk protection and investment are often easier to plan separately. Nevertheless, there are cases in which a whole life insurance policy can still be attractive.

What exactly is a capital life insurance policy?

A capital life insurance policy combines two components in one contract:

• a death benefit for surviving dependents
• a savings component that is intended to build up capital over many years

Part of the premium goes towards death benefit coverage. Another part covers setup and administration costs. Only the remaining portion actually earns interest and is saved. This is a crucial point: those who focus solely on the guaranteed interest rate often overlook the fact that not the entire premium is invested in capital accumulation .

Why the topic is viewed more critically today

In the past, endowment life insurance was considered a classic form of private retirement savings. This was due to several reasons: higher guaranteed interest rates, a smaller product range in the retirement savings market, and the psychological security of combining saving and protection in one contract.

Today the situation is different. Many new contracts suffer from three problems:

1. Lower warranties

Even though the maximum guaranteed interest rate has recently improved again, the guaranteed benefits of many modern contracts are significantly below the level of older policies.

2. Costs reduce returns

Acquisition costs, ongoing administrative expenses, and sales commissions reduce the return. This is precisely why the actual return can ultimately be significantly lower than many consumers initially expect.

3. Low flexibility

Endowment life insurance policies are usually long-term investments. Those who cancel prematurely or stop making payments often achieve worse results than originally planned.

When a capital life insurance policy can still be worthwhile

However, the product shouldn’t be completely dismissed. There are situations in which a capital life insurance policy can be sensible or at least justifiable.

Old contracts with high guaranteed interest rates

Older contracts , especially those concluded during a time with significantly higher guaranteed interest rates, can be particularly interesting . Such policies often contain terms that are no longer offered by today’s products.

People with a high need for security

Those who value predictability, guaranteed features, and disciplined long-term saving may find advantages in a capital life insurance policy. The return is often not maximum, but the structure can be psychologically helpful for some savers.

Tax-efficient payouts

An important point is the tax treatment. Under certain conditions, the so-called half-income procedure applies. In this case , only half of the profit is taxed at the personal tax rate upon payout . This can significantly improve the net income.

When it’s probably not worth it

In many cases, a capital life insurance policy is not the best choice today , especially for new policies.

She is often less attractive to:

• People seeking maximum return opportunities
• People who want to remain flexible
• Savers who prefer to keep insurance and investments strictly separate
• Customers who are not willing to commit to a product with a long-term cost structure

If the focus is on providing for surviving dependents, a term life insurance policy is usually significantly cheaper. If the focus is on wealth accumulation, other retirement savings solutions or long-term capital market investments are often more efficient.

The most important question: New contract or existing contract?

This is a point that many websites fail to explain adequately. For SEO and user experience, you should highlight it very clearly:

Old contract

An older contract can be attractive if:

• the guaranteed interest rate is high
• the tax advantages are favorable
• no excessive additional components are included
• the contract is not unnecessarily terminated shortly before its expiry

New contract

A new contract must be reviewed very critically. The following points are important:

• guaranteed performance
• realistic performance
• Cost ratio
• actual hedging needs
• Alternatives on the market

Guaranteed interest rate development (1994–2025)

This table is important because it immediately shows why many older contracts should be evaluated differently than new ones.

This development alone explains why a blanket answer to the question „Is a life insurance policy worthwhile?“ is not meaningful. A contract with a 4.00% guaranteed interest rate is naturally to be assessed differently than a contract with 0.25% or 1.00%.

Inflation: The often-forgotten factor

Even if the contract nominally shows a decent payout at maturity, you should always remember: money in 30 years won’t have the same purchasing power as it does today. This is precisely where many consumers make a mistake.

Your calculator deliberately displays the nominal development. This is useful for user guidance because it keeps the calculator easy to understand. However, in the article, you should clearly contextualize this:
High performance sounds good, but when adjusted for inflation, it can be worth significantly less. This is especially crucial over long periods.

Tax advantage: The half-income procedure

A real advantage can be the tax treatment. Under certain conditions , only half of the profit is taxed upon payout . In practice, this is particularly relevant when:

• the contract has run for at least 12 years
• The payout only occurs after a certain age.
• In newer contracts, the age of 62 is usually reached.

This is an important advantage that you should clearly state in your content. Many users only compare gross values ​​and overlook the net tax perspective.

Conclusion: Is a capital life insurance policy still worthwhile?

For new contracts, usually only to a limited extent. For good existing contracts, possibly yes.

Anyone taking out a new policy today should carefully consider whether the combination of savings and death benefit coverage truly suits their individual circumstances. In many cases, separate solutions are more transparent, flexible, and offer higher returns. However, those who already hold an older contract with a good guaranteed interest rate should not cancel it prematurely. High existing guarantees and potential tax advantages can still make the contract attractive.

The right decision therefore does not depend on advertising promises, but on hard factors: guaranteed interest rate, costs, term, tax treatment, inflation and personal goal .

Whoever analyzes this thoroughly almost always makes the better decision.