Death benefit insurance comparison: no costs left
- Monthly contributions are paid into an insurance company, which pays the agreed sum in the event of death so that funeral expenses can be covered.
- The amount of the contributions depends on the age of the policyholder on conclusion and the amount of the chosen sum insured.
- Health check can reduce waiting time. Without a health examination, a waiting period in which the full sum insured is not paid must be expected.
- Costs can be deducted for tax purposes.
Organizing a funeral is easy for anyone. It gets even harder when there is not enough money to pay for everything. But you already can to provide during his lifetime. If you are unable to provide capital for your future burial, but still want to relieve your loved ones financially, a death benefit insurance can be an alternative. This can be completed early and bears the cost of a funeral.
Why complete a death benefit insurance ?
Death benefit insurance, sometimes referred to as death insurance, is usually completed to pay the Cost of a funeral to cover even during his lifetime. Often there is a desire to provide for the death and to relieve the bereaved or relatives. If the relatives do not have enough financial resources, they would have to resort to a social burial without insurance. The policyholder pays monthly for several years. If at some point the death of the insured occurs, the amount agreed in the contract will be paid. This money can then be used to cover funeral expenses.
Help in an emergency
Once the emergency has occurred, many tasks are assigned to relatives. A death checklist gives an overview of the key points to be dealt with.
Through the gradual accumulation of credits, insured have the advantage that they do not have to spend the entire amount for the funeral at once, but build up gradually, so to speak. In addition, under certain circumstances – depending on the time of death – not the entire sum insured must be paid. The insurance contract always records the policyholder, ie the person whose death is to be insured, as well as the beneficiary. This receives the money from the insurance in the event of death.
What does the death benefit insurance cover??
Death benefit insurance is a small endowment policy. The paid-in money is invested by the insurer and paid out at a certain point in time – in this case, upon death of the policyholder. the money is not bound to a purpose. This means you do not have to spend the money for the cost of a funeral, but you can use it for other purposes. Even if the amount paid out exceeds the cost of the funeral, you can use the rest of the money freely.
How to get your money
If the death occurs, the survivors must inform the insurance company about the death – in the best case as soon as possible. Some insurers have their own hotline for such cases. For this purpose, the following documents must be submitted:
Copy of the death certificate
Personal data of the beneficiaries (name, address, bank details)
In case of accident, a brief description of the accident, if necessary police protocol in copy
After examination of the documents, the payment of the sum insured will be made as soon as possible to the account of the beneficiary.
Contributions depend on age and sum insured
The amount of the contributions depends on two factors. Firstly, according to your age when concluding the contract and secondly, according to the desired insurance. These can be freely defined upon conclusion of the contract. Choose a sum high enough to cover the cost of the funeral method you want. The better you know in advance what equipment you want for your funeral, the more precisely you can set a suitable sum insured.
Info: The cost of a funeral vary greatly. Simple cremations with minimal equipment are already available from cheap funeral companies from 3,500 euros. In general, fall for a classic earth burial between 7,000 and 10,000 euros. The death benefit insurance should at best cover the total cost of the funeral. In addition, you should also include other cost factors such as a memorial service and grave care.
Also you Older plays a role in the cost of a death benefit insurance. The younger you graduate, the cheaper the posts. If you take out a death benefit insurance in later years, you will incur additional costs as the risk of death increases. This cost is also referred to as a risk discount. Nevertheless, it may make sense to wait until graduation and work elsewhere at an early age. After all, the risk of death among young people is significantly lower.
Regardless of age and sum insured, there are other cost factors in the death benefit insurance. In addition to financial statements, administrative fees are usually charged. It is therefore worthwhile to pay attention to the relationship between additional costs and contribution in a comparison. If the administrative costs are too high, your credit will become less rapid and you may have to pay a lot more for your insurance than you will end up with.
Important insurance elements: duration of the contract, payment phase, freedom of contribution
It is difficult to find the “right” time to take out a death benefit insurance. With insurance companies, one usually endeavors to pay less than one gets paid at the end. However, this is not so easy with the death benefit insurance, because how many contributions ultimately flowed into the insurance depends largely on the death of the policyholder. Planning your own death and bringing it into line with the insurance period is not only extremely macabre, but also almost impossible.
Important: If death occurs before the end of the minimum contract period, your relatives will only receive back the contributions already paid and not the full sum insured. An exception is the accidental death in some tariffs. In case of an accident, the full sum insured will be refunded. Generally, most insurers have guidelines on how long you are at least have to pay contributions, before you can receive the payout.
Depending on the insurer, you can individually set how long you want to deposit in the insurance. If the payment phase is completed, you will still be insured. But you do not have to pay any more contributions. This is also called contribution freedom. Depending on the insurance, the criteria that have to be met differ. The duration of the payment phase is determined in advance, or the end of the contributions depends on your age.
Pay less with a health check
Some insurers offer cheaper death benefit rates if you agree to a health check. Usually this is not provided for a death benefit insurance. But you pay lower contributions if you are in health condition a health insurance. Finally, underline that you have no health problems. Health issues vary from insurer to insurer. In addition, you can often avoid the waiting period with a health check.
Death benefit insurance without waiting time
All death benefits insurance usually provide no payment directly after conclusion of contract. This build-up phase, in which you receive no benefits in the event of death but already pay contributions, is also referred to as waiting time. How long the waiting period for a death benefit insurance is depends on insurance and tariff.
Info: The waiting period of a death benefit insurance is often between 12 and 36 months. Whereby this deadline is not for the Death by an accident applies. In this case, the insurance usually offers an immediate payment.
A death benefit insurance without waiting period is generally available, but this is then necessarily connected with a health check. Insurers want to find out if there is a pre-existing condition that could cause a premature death. In addition, death benefit rates without waiting are usually more expensive than tariffs with waiting time. You should therefore consider carefully whether you waive the waiting time. With a death benefit insurance, the contribution remains the same during the term, so you pay the higher contributions until the end of payment.
Deduct contributions from the tax
In principle, it is possible to deduct the contributions to the death benefit insurance for tax purposes, because it can be stated in the income tax. Also, the benefits of the insurance, which are paid in the event of death, are completely free of income tax. The situation is different with regard to Inheritance or gift tax out. Here, however, the existing Allowances for inheritances considered.
Relieve spouse and relatives financially – which insurance is suitable?
The most important question that you have to ask yourself in this context is: what is needed for your death? A death benefit insurance covers only the funeral expenses, So usually has a sum insured of 5,000 to 10,000 euros. A term life insurance can be concluded with much higher sums of insurance that go into the hundreds of thousands. That’s a good thing, because such insurance is used to compensate for the possible death of the main earner of a family or a married couple. Would you like your spouse or your children secured financially even after your death As a rule, it is not enough to provide “only” for the funeral expenses. This is more comprehensive with a term life insurance, with the payout amount ultimately the funeral costs can be paid.
Difference in mortality and term life insurance briefly summarized:
Death benefit insurance is generally a smaller form of endowment life insurance, which is taken out to provide for one‘s own burial while still alive. Over a longer period credit is saved. The contributions are correspondingly high, but there is a payment guarantee. The paying out the insurance takes place in any case at a later death of the policyholder.
With the term life insurance is No credit saved. Only the risk of death of the policyholder is insured. Accordingly, the contributions are lower. This form of life insurance only makes, if the insured person dies during the term. If there is no death during the insurance period, the policyholder will not receive any benefits. The insurance relationship ends after the agreed term.
You should pay attention to this when taking out a death benefit insurance
Not all death benefit insurance offers identical benefits. Compared with death benefit insurance, they often show that they are in the amount of the maximum sum insured, the duration of the contributions or whether or not there is one Profit sharing or profit sharing granted. To get a quick overview of the contents and especially the monthly contributions of insurers, you can carry out a death benefit insurance comparison. In addition to the contributions and the sum insured, pay particular attention to the following components:
The sum insured determines how much money you will receive in the event of death. It should ideally cover all costs incurred. It is helpful, if at the time of completion important cost details, for example, what kind of funeral is desired, are already known.
There are life insurance policies with and without waiting time. In the case of a tariff with a waiting period, you will only receive full benefits in the event of death after the waiting period has expired. Death benefit insurance without waiting time usually requires a health check and may be more expensive.
Most death benefit plans have a maximum age beyond which policyholders are free of charge. Conversely, this means you have to pay contributions until you reach that age. However, this also depends on the minimum term of the insurance contract. If you take out a death benefit insurance at a very young age, you may be eligible for a non-contributory benefit. Or you can significantly reduce your monthly contributions by agreeing to a longer payment period. Here it is worthwhile to obtain an individual offer from various insurance companies.
Surplus participation in case of benefit
The insurance company will create your contributions for you. If, due to economic developments, returns are higher than expected, you will also get some of those gains on a with-profits plan. The insurance then converts these and puts them on the payout amount on it. With a death benefit insurance, no huge profit shares are expected, but you should pay attention to this performance detail, so that even small profits are not lost.
Pay attention to performance, only then to the price
If the most important key points, such as the design of the funeral and thus the required sum insured, should be clear not just any cheap death benefit insurance to lock. In addition to the benefits of the respective tariff, the relationship between administrative costs and insurance contributions is also relevant. First of all, you should only choose tariffs with regard to your own desired performance. If you have made a specific pre-selection from different providers, you can now compare the details of the policies. With almost identical services, the decision is probably easy: Here is the cheaper offer.
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