The cost of funerals continues to rise.

To prevent your family from having to pay upfront costs on the day of your death, you may want to consider purchasing an insurance policy that will help them meet the expenses associated with your funeral.

But before signing, it is essential to take certain precautions to ensure that this coverage is suitable.

Funeral insurance, what is it for?

Funeral insurance is one of the so-called “capital” contracts.

Its primary objective is in fact to constitute a fund, defined at the time of signing, in order to pay all or part of the funeral benefits at the time of the subscriber's death.

A more complete variant can combine it with a funeral services contract, in order to plan, in advance, the organization of the future ceremony and to choose in particular your coffin or your funeral urn, a possible tombstone ...

Depending on the formulas, you can plan everything from A to Z. And in France, nearly 5 million inhabitants have taken out funeral insurance, a figure which is constantly increasing according to the French Insurance Federation.

An investment at a loss?

If, on paper, funeral insurance seems like a cheap and easy way to pay for your funeral, the reality is more mixed. In a study published in 2019 and comparing the eleven market leaders, the association 60 million consumers compares these contracts to

“ruinous investments”

. At issue: the fact that the amount of contributions paid by the deceased is far greater than the premium received by the beneficiaries.

Thus, a 62-year-old subscriber will pay on average nearly 5,400 euros in twenty years, but the premium received by his family will only be 4,000 euros.

An average net loss of 1,400 euros which only increases with the duration of the contribution.

Because whatever the amount of the payments, the person will receive the sum defined at the signing of the contract.

"The longer you live, the more risk there is of losing money," summed up the association.

Among the other major drawbacks, 60 million consumers denounce inflated management fees as well as a very late payment of capital, sometimes more than a month after death because it is conditioned on the sending of numerous supporting documents (certificate, credit card). identity, invoices), which obliges relatives to advance the funeral costs.

Several alternatives

Beyond funeral insurance, you can opt for insurance in the event of death. This particular form of life insurance has only one purpose: to pay a certain amount to a named beneficiary upon your death. Unlike a savings contract, this provident product does not allow you to withdraw this money during your lifetime. If death insurance aims to provide future financial assistance to your loved ones, it has several drawbacks noted by 60 million consumers.

Certain causes of death, such as suicide but also accidental death during practices considered to be risky (“dangerous” sports activities, use of narcotics), in fact often constitute cases of exclusion, while if death does not occur not by the end of the contract, the accumulated money is simply lost.

Another possible choice is to invest money in a classic life insurance policy, the beneficiary clause of which may designate one or more relatives.

When you die, they will receive the funds that you did not use during your lifetime, which may allow them to reimburse funeral expenses.

Finally, you can make a donation with charges to a notary, a clause of which will stipulate that part of the sum must be allocated to the organization of your funeral.

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