What is Funeral Expenses insurance?
A product that gives you and your family peace of mind at that difficult time when you have just lost a loved one.
What is the purpose of Funeral Expenses insurance?
With just one simple telephone call, Funeral Expenses insurance spares your family from having to perform all the bureaucratic procedures and from bearing the expense associated with a funeral service, even when the death occurs far away from home. Also, the statutory heirs will be assisted with all procedures necessary in order to distribute the inheritance, deal with any pensions, record the death with the Social Security, etc. etc., which are all important obligations at this time.
What other advantages does Funeral Expenses insurance offer?
In addition to the main cover, by taking out this insurance you will gain access to Private Medicine at negotiated prices, a broad network of fixed-price Dental Services, personalized or telephone-based Legal Advice through a network of Law Firms, Travel Assistance when abroad, etc. etc., making this insurance the most complete combined insurance for the whole family.
What kind of Funeral Expenses insurance is best for me?
Given the lifelong nature of this insurance, the LEVEL PREMIUM option which, as the name indicates, keeps the premium payable at a constant rate for the lifetime of the insured, and unless there are any increases in the Sum Insured, the premium remains constant. Initially this is the most expensive option, but as from retirement, when disposable income becomes tighter, the premium turns out cheaper than all the other options, as it is calculated on the basis of the age of joining the Company. This type of insurance is the most popular in Spain, as over 95% of people insured for Funeral Expenses (22 million Spaniards) have insurance of this kind.
Are there any other kinds of Funeral Expenses insurance? YES
Funeral Expenses insurance with a semi-natural premium
It is characterized by the fact that at young ages the premium is very low, given that it gives no recognition the length of time the policy has been in force, and once you reach the age of 60 the premium is levelled off. The premium payable increases year-on-year in accordance with the age of the insured – as opposed to level premiums – and on the basis of increases in the sum insured, until it levels off.
Funeral Expenses insurance with a natural premium
This is similar to the previous kind, although it is even cheaper at young ages, but the difference is that the premium does not level off at any age, and as such in very old age it is practically impossible to afford the premiums. As with the previous kind, the premium increases every year in accordance with the age of the insured and the increase in the sum insured.
Funeral Expenses insurance with a hybrid premium
This is the result of the need to offer an alternative to the natural premium, combining the three forms, and so at young ages it is cheaper, and as with the semi-natural premium, as from age 60 the premium is levelled off. The premium goes up every year – until it is levelled off – in accordance with the age of the insured and the increase in the sum insured.
How can I tell which kind of insurance is best for me?
In order to protect the rights of consumers, the Government made an addition to article 60 of the revised text of the Private Insurance Regulation and Supervision Act by way of Royal Decree Law 1298/2009 of 31 July, whereby it became compulsory to supply an INFORMATIVE NOTE (Article 105 bis) prior to the execution of an agreement for Funeral Expenses insurance, drafted in clear and precise language, with the following contents which are summarized below:
1. In accordance with the type of insurance offered:
a) Identification of the type of insurance (level, semi-natural, natural, or hybrid).
b) Characteristics and calculation method for the initial premium.
2. For all insurance types:
a) Identification of the risk factors and the rate to be applied in policy renewals, etc.
b) Table showing how commercial annual premiums evolve until the insured is 90 years old, and also how the sum insured evolves.
3. Optional accessory cover provided with funeral cover, stating the amount of the premium.
4. Conditions for the termination of the agreement.
5. Possibility of the Insurer refusing to renew the agreement.
6. Whether or not there is a right to rehabilitation, and the rules regulating this.
So what is the final price of Funeral Expenses insurance?
The final price depends on how long the insured lives, but if we consider someone living to the age of 90, the premiums paid for each type of insurance are shown in the graph below: