Death benefit insurance
A death benefit insurance is usually a life-long endowment insurance against death with a relatively low sum insured. Above all, it should cover funeral costs and other expenses directly related to death, so as not to burden the surviving dependents with these costs ( burial obligation ), but in particular also to ensure an appropriate burial if there are no surviving dependents. These insurances were advertised especially after the death benefit from the statutory health insurance funds (GKV) was discontinued in 2004, which was recently limited to 525 euros. Such life insurances were formerly known as small life insurances because of the small sums insured . Typical providers of death benefit insurance are so-called death benefit funds . These are smaller insurance companies that are often organized in the legal form of a mutual insurance association (VVaG) and, unlike large insurance companies, have been offering this form of insurance for many decades.
Contract drafting
The contracts vary from contribution payments up to 65 or up to 85 years of age or for a lifetime, and fixed contribution periods - usually up to 25 years - can also be contractually agreed. The sum insured usually increases in the course of the contract through benefits from the profit sharing .
As with all death insurance, the amount of the contribution depends largely on the age of the insured person at the start of the contract. If you graduate at an older age, you can expect correspondingly high contributions to the mortality rate to be expected each year. On the other hand, contributions from younger insured persons are partly saved in order to provide for the high mortality in old age. In contrast to normal life insurances, a health check is often dispensed with when the contract is concluded, as an extensive examination is not worthwhile given the low death benefits. Rather, in such cases, a three-year waiting period is required in which the benefits are paid out in stages. In the event of death in the first year of insurance, often only the contributions paid are reimbursed.
The death benefit insurance is generally paid up to the age of 85, after which the death benefit insurance continues to run free of charge until the age of 100. The insurance benefit (i.e. the sum insured plus surpluses) of the death benefit insurance is due when the insured person dies or turns 100.
distribution
Often the insurance companies cooperate with the funeral home and bundle part of a contractually agreed funeral provision in the death benefit insurance .
Legal security
In contrast to life insurances in the event of survival, death benefit insurances are not regarded as disposable assets in the event of a need for social assistance ( Section 90, Book Twelve of the Social Code ). Current contributions to death benefit insurance can also be taken over as additional needs when receiving social assistance ( Section 33 SGB XII). The prerequisite for this, however, is that neither a subscription right nor a payment date other than "upon death" have been set in order to ensure that the funds are used for the intended purpose. The maximum amounts for death benefit insurances worth protecting are based on the respective local conditions and can be obtained from the responsible social welfare office.
criticism
The economic benefit of life insurance policies with such small sums insured, often EUR 2,500 to EUR 10,000, is debatable. The premium surcharges to be taken into account by the insurer for administration, in particular the collection of premiums, are relatively high. The Association of Insureds described this insurance as “not recommended”, but later revised this statement. The Rheinische Post comes to the conclusion that these "insurances are not worthwhile".
Contributions for younger people under 50 are naturally low, but other forms of savings are usually more economical.
Also Stiftung Warentest has come to believe that a funeral insurance does not pay. In particular, people who sign the contract when they are over 65 always pay extra. As an example, it was mentioned that the model customer has to pay a total of 7,245.50 euros into the contract for a term of 20 years in order to receive an insurance sum of 5,000 euros, since only a small part of the contributions goes into the savings component and the rest of the money flows into risk protection and administrative costs. According to Stiftung Warentest, term life insurance with a falling sum insured is more effective for these purposes.