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Funeral insurance to cover funeral expenses

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First things first

The average cost of a funeral is between 7,000 and 8,000 euros

Provides financial security for the family in the event of death

The most common variant of funeral insurance is the lump-sum payment

Funeral insurance is rarely recommended, because it's expensice and the sum insured is limited

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Patrick Ott
Patrick Oliver Ott
Expert for insurance and finance
11. April 2022
cover funeral expenses

What is funeral insurance?

Funeral insurance is an insurance coverage specifically for the event of death. A sum insured is agreed upon, which is used to cover the costs of the funeral. The sum insured can be 2,000 or 5,000 euros, but also 20,000 euros. This is intended to relieve the family financially if the insured person dies.

• The average cost of a funeral is between 7,000 and 8,000 euros.

There are different variants of funeral insurance. The most common is a lump-sum payment, which can be used to cover funeral expenses. Alternatively, there is also insurance with benefits in kind. In this case, the money is transferred directly to the funeral home and not paid out to the families.
This insurance is offered, for example, by Deutsche Bestattungsvorsorge Treuhand AG. The advantage is that the insured can also make provisions for their death at the same time.
Depending on the tariff, the benefits include:

• Caring for the deceased person
• Casket or urn
• Cremation
• Memorial service
• Organization and execution of the funeral

Is it worth getting funeral insurance?

The purpose of funeral insurance is to provide financial security for the family in the event of the death of the insured person. The basic idea behind the insurance coverage makes sense. But despite this, this insurance is rarely recommended. Because funeral insurance is expensive and the sum insured is limited - maximum 20,000 euros.
In addition, only the funeral costs are covered. The financial gap within the family that the deceased leaves behind is not insured. Therefore, this coverage is only recommended if only the funeral costs are actually to be covered. If the family is to be provided for financially, another insurance makes more sense.

What other insurance covers funeral expenses?

There are many other insurance policies that can cover funeral expenses. For example, accident insurance, which includes a death benefit. But be careful: This only pays out in the event of an accident.

Life insurance makes more sense. This is available in many different variants. It can be a pure risk insurance that pays a capital sum if the insured person dies – the term life insurance. This covers not only the funeral costs. The sum can be so high that the family is financially secure for a long time. It is also suitable for securing a credit.

Another variant is life insurance with a pension. Here, the contribution is made up of a savings amount and a risk amount. The savings amount is invested in order to pay out an annuity or capital to the insured person when he or she reaches a certain age. If the insured dies before then, the family receives a lump-sum payment. The tariff combines coverage for surviving dependents with retirement provision.

Is it better to have term life insurance or funeral plan?

In most cases, it is better to purchase term life insurance instead of funeral insurance. This is because one crucial difference between the insurance policies is their purpose: funeral insurance is intended to cover funeral expenses. On the other hand, term life insurance provides financial security for the family. For this reason, a higher sum insured can also be agreed. In addition, term life insurance is usually even cheaper. So if you not only want to secure your funeral, but also provide financially for your family, you should take out a life insurance policy that covers the event of death.

There are several ways you can financially secure your funeral, cremation and memorial service. The most commonly recommended is term life insurance, which covers not only the funeral, but also your family. However, you must always check individually which insurance makes sense for you and which sum insured you need. We will support you and answer all your questions about funeral insurance and (term) life insurance.
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