Funeral Insurance

What is funeral insurance used for?


"Protecting your family by preventing them from paying for their funeral" is the main argument of organizations that market funeral contracts. Indeed, this type of contract makes it possible to provision a capital which will be used to cover the funeral costs when the time comes. In addition to the pain associated with the death, the family does not have to bear this expense, the amount of which is not negligible: on average 3,500 euros.

"Prepare for your release in advance" is the second argument for funeral insurance, since it helps define how the funeral will unfold. Thus, the subscriber can specify in a funeral agreement his wishes for the ceremony: burial or cremation, choice of coffin or funeral urn, transport, flowers ...

Generally, the subscriber who defines the nature of the services also designates a specialized funeral director to carry them out.

This is one less burden for the family who, in order to respect the deceased, may be hesitant in the choice of benefits or even not have the will to do so.

In addition, it is not always easy to find your way around when, for the same product, the prices vary from simple to triple depending on the funeral company and the region.

How much does funeral insurance cost?

Buying funeral insurance doesn't have to be very expensive.

Especially since it is up to the subscriber to define the capital he wishes to provision.

The number of contributions depends on the payment method

  • Single payment: the defined capital is paid in a single contribution. 5000 euros is a good average for a funeral contract. Rather recommended for people who are already elderly.
  • Temporary payments: you choose to pay monthly payments for a defined period (5, 10 or 15 years). Count around 40 euros per month for a capital of 5000 euros over 10 years. Rather recommended for young seniors who want to build up capital smoothly.
  • Lifetime payments: a capital is defined, and monthly payments are made until his death. Rather recommended for people approaching the age of death statistics. If you are still young, the risk is to pay more than the defined capital, the money overpaid is sunk. Conversely, the risk for the insurer is to have to pay too quickly capital that has not been sufficiently provisioned by monthly payments. This is why the monthly payments are higher, 50 to 70 euros per month for a capital of 5000 euros.
What are the guarantees of funeral insurance?

The capital raised can be used to finance, among other things, the coffin, the ceremony, the grooming and preparation of the body, the transport of the deceased, the tombstone, but also the announcements, the digging of the grave and the concession of the parcel of land rented by an individual from the town hall to bury the deceased. Some funeral companies even offer secondary services such as assistance with administrative and legal procedures, repatriation of the body and financing of the travel of relatives to the place of burial. In all cases, the guarantees provided must be strictly specified.

Who are the beneficiaries of funeral insurance?

Funeral insurance is a fairly flexible contract. In the same way that we can define the capital and the way to constitute it, the subscriber can specify the beneficiary or beneficiaries in the funeral agreement. He can choose a relative (or several) who will be given the capital, in order to pay for the funeral. If there is excess money, the beneficiaries are required to share it among themselves.

In the event that the subscriber personalizes his funeral, he generally designates a funeral director as beneficiary. It is to her that the insurer will pay the capital and it is she who will perform the service according to the wishes of the deceased. Always if there is excess money, the provider will then return the amount to the designated relatives.

Do not confuse funeral insurance with death insurance

For the uninitiated it is quite easy to confuse funeral insurance with death insurance.

Funeral insurance is linked to the financing of funerals, or even to their organization, while death insurance provides for the payment of a capital or an annuity to a beneficiary (or more) in the event of the death of the insured before the date. end of contract.

In other words, the contract is for a fixed period (10 years, 15 years, 20 years) and on a sum to be paid to the beneficiary.

These two data, as well as the age at subscription, determine the number of contributions. If the contract covers, for example, 10 years and the insured dies after 8 years, then the agreed sum will be paid to the beneficiary.

On the other hand, if the death does not occur after 10 years, the sums involved will be lost. This contract is rather recommended for people who are still young who support the home and want to protect their family in the event of death.

Finally, if you want to build up capital for your loved ones, you should turn to life insurance: regardless of the time of death, the beneficiary will receive the capital saved.

What to check before taking out funeral insurance

It is understood that the subscriber will no longer be of this world to check that the quality of the service is up to his expectations. However, it is possible for him or her upstream to check certain key points that make up the quality of a funeral contract:

Fees: Generally speaking, pension funds apply fees on payments and annual management fees. Please note that these fees are deducted from the capital and can be exorbitant (sometimes up to 30% of the capital). So, check that they will cut the capital only reasonably. And also, that the remainder will be sufficient to finance the funeral.

The revaluation of the capital: it is generally very low whereas the funeral costs have known strong increases in recent years. Check that the defined capital will still be revalued correctly so that, when the time comes, it will cover the costs of the funeral.

Waiting periods and payment periods: a waiting period is applied to the subscription of a funeral contract. This means that for a few months (sometimes up to 1 or 2 years) no capital can be paid if death occurs. This waiting period should not be too long, just like the period for payment to the beneficiary at the time of death. Some organizations promise a quick payment (48 hours) but ask in exchange for numerous supporting documents.

That’s why it’s better to tell your loved ones that they are beneficiaries to avoid having to advance the funeral expenses and have to wait a long time for reimbursement.

Coverage exclusions: people who commit suicide during the first year after taking out funeral insurance are generally not covered. Just like people who have taken out a contract after learning about their illness and hiding it from their insurer. Note that death resulting from the use of drugs and alcohol is also excluded from the guarantee.

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