Is it worth having a death insurance policy? How much does it cost? This type of policy, colloquially known as “death insurance”, allows the company to take care of paying for mortuary, transfer of the deceased, flowers, coffin and cremation or burial.
In this post we analyse the cost and profitability of taking out a funeral insurance policy and from what age is it interesting contract each type of premium. Once the first bill has been formalised and paid, the client is covered, which provides great peace of mind for the insured and their family members.
It should be borne in mind that this insurance is one of the most popular in our country and a large percentage of the population has it (more than 21 million people) and we must know which is the best way to insure them. best death insurance. For many decades it has been one of the star products, The cost of a funeral at a stroke is a great strain on the finances of those who have to pay for it. the next of kin, who have the obligation to pay for the funeral.
How much does a funeral cost?
A normal funeral can cost between 3,000 and 7,000 euros, although if the body has to be transferred between cities, the total cost can be more than 10,000 euros. If the transfer is international, it is better not to think about it.
To give you an idea, the LIFE INSURANCE The cost need not be exorbitant, for example, a married couple in their 40s with 3 children can take out insurance for just over €6/month for all 5 of them.
Please note, however, that the cost of the death insurance is related to the age of the insured (especially in the natural and mixed premium). Therefore, the older the insured, the higher the cost of funeral insurance.
What is the cost of funeral insurance and is it cost-effective?
The final cost of a death insurance policy will depend on the number of years of life that the insured person reaches and the type of premium that is contracted. Bear in mind that...
Up to the age of 50-55, the mixed premium is the best and does not rise much in price as we get older. From 55 onwards, the level premium is ideal to avoid a high jump in cost when we reach 65-70 years of age.
Not all funeral insurance policies are the same. As we said, the premium rate will determine the annual price development of the same:
1. Natural premium
The natural raw material is regulated according to the age of the contracting party. The older the person is, the higher the premium to be paid, which increases year by year. This type of insurance is not very profitable for people over 50 years of age, but it is very profitable for young people up to about 35 years of age.
2. Level premium
This type of premium increases as the cost of the funeral increases and establishes a fee that is considered fixed, regardless of age. In other words, it rises in line with the CPI of the cost of the funeral service, not as you get older. From the age of 55-60 it can be an interesting option.
3. Mixed premium
Initially a natural premium is paid (usually up to the age of 60-70) and then a level premium is paid. It is usually the most cost-effective for young people.
4. Single premium
It is paid in one lump sum. It is usually only of interest to older people who have not had such insurance during their lifetime.
It should also be noted that it is possible to take out this insurance in a family plan, insuring as many members as you wish.
Is funeral insurance cost-effective?
The reason why this insurance is so commonly chosen is because of its wide coverage (funeral expenses, transfers, cremation or burial) and, primarily, for the support in the early stages of these days of mourning. You don't have to worry about the cost or what to do in these first moments. The company and the funeral home take care of it.
For this reason, the figures for taking out this type of insurance in Spain are surprising: as we have said, there are over 21 million people protected out of a population of 46 million and, at the present time, death insurance covers the 60 % of funerals each year in Spain.
Have you been thinking about taking out this type of policy? At PIB Group Iberia we advise you to find the insurance that best suits your age and your spatial needs. Discover our funeral insurance and contact us so that we can help you.
