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Life insurance: better than funeral insurance?

The French save above all to prepare for their retirement and raise funds for a real estate project. More and more individuals are considering investing, in the form of life insurance or funeral insurance, as a means of financing their funerals. As the cost of funerals continues to rise, this precaution is understandable.

“The dying can wait”. The title of the latest James Bond perfectly sums up the thoughts of anyone longing for a long, prosperous and eventful life. But this sense of optimism is not opposed to anticipating death and doing everything to make this transition as painless as possible for the living. In practice, this results in significant growth in the market for death insurance and life contracts. Although funeral insurance has several advantages, life insurance remains the product of choice for people who choose to organize their own funeral.

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Funeral insurance offers still perfect

ONE life insurance is not really designed to finance the funeral of its subscriber. Rather, this feature falls under funeral insurance if all clauses and operation have been adjusted accordingly.

This formula has several advantages: at the time of death, the family of the deceased no longer worries about the formalities of the funeral. All details are mentioned in the contract, including:

  • The type of ceremony;
  • The funeral business;
  • The coffin model.

The service provider then becomes the beneficiary of the contract and of the guaranteed amount. This jackpot varies from 3000 to 6000 euros depending on the insurance company . The life contract does not offer the same level of peace of mind to families. While waiting for the release of funds, the relatives of the deceased must advance the expenses of the funeral, an obligation far from obvious to everyone. However, funeral insurance is not perfect. Some warranties are irrelevant, such as:

  • Entrance fees to the funeral parlor;
  • Conservation Care;
  • Transport costs before casket.

Admittedly, some assistance services address these deficiencies, such as childcare during the ceremony and psychological support up to 6 months after the death. But the shortcomings of funeral insurance seem too many and prevent its final start. After all, the enjoyment of capital and deposits on the contract is not always guaranteed. If the payouts exceed the guaranteed fund, the insurance company will not reimburse the deductible. If the subscriber dies after the end of the contract, he loses all these contributions.

A beneficial life after death contract

Another difference: the funeral contract does not generate interest . Life insurance, on the other hand, provides income of up to 2% of the amount invested in a Euro fund. This fee, even low, is interesting, knowing that funeral services cost more every year. And often the subscriber dies long after signing his contract.

The low revaluation of the guaranteed capital on funeral insurance (+1% per year) is de facto punitive. Sometimes the difference between the cost of the funeral and the guaranteed capital exceeds 1500 euros. The life contract is also characterized by the fact that there are no costs for a full or partial surrender to life insurance. For all these reasons, life insurance remains the favorite savings product of the French total outstanding of €1.821 billion per 31 May 2022 .

Funeral insurance will be taken out by 5 million French people in 2021, with contributions of 1.6 billion euros. However, faced with an aging population, experts expect a steady increase in funeral insurance in the coming years.

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