Direct answer
Life insurance in Austria pays an agreed sum to your beneficiaries if you die. Pure term life cover for a 40-year-old typically costs 15 to 40 euros per month for 200,000 euros of coverage (FMA market data 2025). Premiums carry 11 percent insurance tax (4 percent on single premiums). If the contract ends before 15 years, returns face 27.5 percent capital gains tax (§ 27 Austrian Income Tax Act). durchblicker.at lets you compare policies without obligation.
At a glance
- Term life insurance: death benefit only, low premiums from around 15 euros per month.
- Endowment policy: savings plan plus death benefit with a guaranteed minimum payout.
- Unit-linked policy: savings portion invested in funds, higher upside, no capital protection.
- Insurance tax: 4 percent on single premiums, 11 percent on recurring premiums (§ 6 VersStG).
- Capital gains tax: 27.5 percent on returns if the policy runs less than 15 years.
- Supervisor: FMA. Consumer support: AK and VKI.
Life insurance secures your loved ones financially if something happens to you. The Austrian market is regulated under the Insurance Contract Act, the Insurance Tax Act and supervised by the Financial Market Authority (FMA). This guide explains the available policy types, when term life makes sense, and how tax, capital gains tax and the premium-supported pension (PZV) work together.
Types of life insurance
Term life insurance
Pure death benefit, no savings part. Low premium, high coverage – ideal for family or mortgage protection.
Endowment life insurance
Classic capital life policy with a guaranteed minimum payout on death or maturity. Conservative wealth-building.
Unit-linked life insurance
Savings invested in mutual funds. Higher upside but market risk – no capital guarantee.
Index-linked life insurance
Returns track stock indices, often with a minimum interest rate. Middle ground between safety and yield.
Why do you need life insurance?
Family protection
Income replacement for spouse and children if the main earner dies.
Mortgage protection
Outstanding loan repayment so survivors don't have to sell the home.
Retirement planning
Long-term capital build-up – PZV with state subsidy under § 108g EStG.
Estate planning
Beneficiaries receive the payout outside the regular inheritance procedure.
Funeral costs
Smaller policies cover funeral expenses and short-term liquidity needs.
What should you check? (AK & FMA guidance)
- Coverage amount: 3 to 5 times annual net income (source: AK Vienna insurance advisory).
- Term: until children are independent or your mortgage is paid off.
- Health questions: answer truthfully – misrepresentation voids cover (§ 16 VersVG).
- Beneficiaries: name them explicitly and update on marriage, divorce or birth of a child.
- Surplus participation: only guaranteed values are binding (FMA consumer guidance).
- Dynamic option: yearly increase of premium and sum without new health check.
- Cooling-off: 30-day right to withdraw under § 165a VersVG, no reason required.
- Commissions: ask for written disclosure of costs and commissions (VVO standard).
Tax aspects in Austria
Austrian tax treatment of life insurance depends on the policy type, term and payout. The Insurance Tax Act (VersStG) and the Income Tax Act (§ 27 EStG) are the key rules.
Insurance tax
Recurring premiums carry 11 percent insurance tax, single premiums 4 percent (§ 6 VersStG). Tax is already included in the gross premium.
Capital gains tax (KESt)
If you cancel before 15 years, or the contract runs less than 15 years, the gain is taxed at 27.5 percent (§ 27 (5) EStG). Policies with regular premiums and a term of at least 15 years are exempt.
Premium-supported pension (PZV)
Under § 108g EStG, savers receive a state subsidy (2026: 4.25 percent, published by the BMF). Minimum term ten years, payout typically as a lifetime annuity.
Inheritance and gifts
Austria has no inheritance or gift tax. Payouts to named beneficiaries are usually tax-free. Larger gifts must be reported under the Gift Notification Act.
Frequently asked questions
How much does term life insurance cost in Austria?
According to FMA market data, a 40-year-old non-smoker pays roughly 15 to 40 euros per month for 200,000 euros of coverage over 20 years. Smoking, pre-existing conditions and high-risk occupations raise the premium.
How large should the sum insured be?
AK Vienna recommends 3 to 5 times annual net income, but at least the size of any outstanding loans plus three to five years of living costs.
When is the payout tax-free?
Returns from regularly funded life insurance are exempt from capital gains tax after at least 15 years of term (§ 27 EStG). Earlier termination triggers 27.5 percent tax on the gain.
What happens to the policy after divorce?
The benefit goes to whoever is named in the contract. After a divorce you should update the beneficiary in writing – the insurer follows the contract, not your marital status.
Who handles complaints?
The FMA supervises insurers, the Austrian Insurance Association (VVO) runs a conciliation board, and consumer disputes can also go to AK or VKI.
Is a unit-linked policy worth it?
It offers higher upside but no capital protection. Suitable with a long horizon (20+ years) and tolerance for market swings. Compare costs and the fund line-up carefully (FMA advice).
In-depth guide
Want premium examples, provider tables and tax details? Read our full Life Insurance Austria 2026 guide.
Read the full guideLife Insurance Guides
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