Extraordinary interest
If a higher return than the guaranteed return ( accounting interest ) is generated when the contributions are saved , which is regularly the case with German life insurance companies, the amount in excess of the accounting interest is non- accounting interest .
For annuities , this is profit sharing and profit sharing called. The insurer contractually promises the policyholder the profit sharing. The profit shares contain non-accounting interest insofar as they exceed the portion of the reimbursed administrative and risk portions of the contribution and their interest. The regular profit sharing takes place in such a way that a "bonus pension" is added to the insured pension without further contributions being paid. Occasionally, the profit sharing is also collected as credit and paid out to the policyholder when the insurance is due, or used for the purpose of reducing premiums.
For endowment life insurances , capital income must also be taken into account that are not required as planned for the fulfillment of the contractual benefits (death of the policyholder).
Extraordinary interest on the savings shares is subject to income tax if it involves the cash payment of profit shares from capital-forming insurance. For contracts concluded since 2005, the old age income law that has been introduced also means that profit shares are taxable in full if the policyholder has not yet reached the age of 60 at the time of access and the cumulative contract did not have a term of at least 12 years. If these two criteria are met, the so-called half-income procedure applies and only 50% of the investment income is taxable.
