Specific insurance allows you to protect your family in the event of premature death or to finance your funeral yourself. - IStock / City Presse

In addition to being an emotional ordeal, a death can have serious financial repercussions for loved ones. To protect your family and ensure your last wishes are respected, you can take out different types of insurance. But beware, each has its own objectives and modalities.

Funeral insurance to organize your funeral

The funeral convention, also called funeral insurance, is the most publicized. Some 4.5 million contracts of this type were in effect at the end of 2017, according to figures from the French Insurance Federation. This product has a clear mission: to help you prepare for your future funeral during your lifetime. That said, two formulas must be distinguished.

The vast majority of funeral agreements are limited to funding all or part of the burial. This is called the "capital" contract. In practice, your contributions will make it possible to constitute a kitty which will be revalued each year by the insurance company. At the time of your death, this money will be paid to the designated beneficiary (a relative or an undertaker) to pay the costs of your funeral.

You can otherwise opt for a contract called "in benefits". In addition to the financial envelope, this formula allows a tailor-made organization of the future ceremony with a funeral operator, from the choice of the coffin in which you wish to rest, to the text to be written on your burial. Everything here is customizable and changeable over time. Good to know: regardless of the number of years of contribution, it is in any case the amount determined from the start in the contract that will be allocated at your death. To avoid contributing with lost funds, you must favor a single, temporary payment method (over a chosen period) or else subscribe to this product around 70 or 75 years to contribute in life annuity until the end of your life.

Death insurance to support loved ones

Insurance in the event of death also makes it possible to foresee the financial consequences of your disappearance. Except that in the present case, it is essentially a matter of anticipating premature death. Most often, this type of contract is thus taken out on the occasion of a mortgage under the name of borrower insurance. The objective is then to cover the monthly payments of the loan in the event of death, even disability or loss of employment, according to the guarantees contracted. We are talking here about temporary death insurance since the agreement will expire at the end of the loan repayment. If you are still alive at that time, you will therefore have contributed to the money lost.

It is also possible to use this cover outside of a loan, in order to secure the future of his family or to organize his succession. By opting for the “whole life” guarantee, all of the premiums paid will go to your loved ones upon your death, regardless of its date. It is up to them to use the amount as they see fit. But beware, once the money is placed on this product, you cannot withdraw it for any reason. To leave you more room for maneuver, you can rather go through a classic life insurance that you can unlock during your lifetime if necessary and which will be paid to your beneficiary when you die.

Economy

Long-term care insurance: four things to know before taking out a guarantee for loss of autonomy

Society

Nîmes: Retiree stole life insurance from 86-year-old "friend"

The differences in summary

These pension products respond to very different logics for ...

- The objective of the contract: death insurance aims to protect your loved ones, while the funeral agreement makes it possible to organize and finance your funeral.

- The capital promised: it depends on the contributions you have paid in the case of death insurance, whereas it is determined from the outset in the funeral contract.

- The subscription period: death insurance requires taking action early, especially as some companies refuse membership beyond 65 years. Conversely, the funeral agreement can be signed much later, up to 80 or even 85 years.

  • Family
  • Insurance
  • Obsequies
  • Money
  • Economy
  • Undertaker