Pay out funeral insurance earlier, how is this taken care of in Germany?

Normally, a funeral insurer only pays out after the insured person has died. However, in certain situations, the cover of the funeral insurance can be invoked earlier. The insurer will then pay out (part of) the insured amount earlier. The situations in which this may be the case are discussed below.

Terminal disease

Some funeral insurers have included in the policy conditions that the policyholder is entitled to an advance of the insured amount if the policyholder suffers from a terminal illness. The advance payment can then be used, for example, to purchase extra (palliative) care or to fulfill specific wishes of the policyholder, such as a last holiday with the family.

Requirements

The insurers that pay out earlier in the event of a terminal illness sometimes apply the rule that the policyholder does not live longer than 3 months and that the term of the insurance is at least x number of years, for example 2 or 3 years. Check with your own insurer whether such restrictive conditions apply in your situation. The fact that payment is made earlier usually has no influence on the amount of the premium that may still have to be paid, in Germany we call that the Sterbegeldversicherung für ältere Menschen.

Buy off insurance

Payment is also made earlier when the funeral insurance is surrendered. However, this does not concern part of the insured amount, but part of the premium already paid.

Make premium free

When the policy is made non-contributory, the premium payment stops, but the insurance continues until death. The funeral insurer will then pay out a certain amount. How high that amount is depends on:
  • The terms of the policy
  • The premium paid to a company like LV1871
  • The value of the premium in the event of death, because interest may have increased the value of the premium over time

Surrender policy

When the funeral insurance is surrendered, the insurance is canceled and the insured is no longer entitled to a payment/compensation in the event of death. Depending on the amount of premium paid and the policy conditions, the insured is sometimes entitled to the surrender value of the funeral insurance. Ask your funeral insurer how the surrender value is calculated.