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Death benefit insurance vs. Funeral insurance: what are the differences?

Dec. 20, 2023

4 min reading time

You probably prefer not to talk about it, but it's still wise to think about it: how will your financial situation change after your partner dies, or vice versa? Thinking about the future is an important aspect of responsible financial management. One of the crucial considerations in this regard is taking out insurance policies that protect you and your loved ones from unexpected events. In this way, you may avoid money worries. Two common insurance policies often mentioned in this conversation are term life insurance and funeral insurance. But what are the differences between the two, and which is most appropriate for your situation?

Financial situation

Even after the death of your partner, many fixed expenses remain the same. Think, for example, of the mortgage or rent, gas, water and electricity, municipal taxes and levies, and insurance. When someone dies, the question is whether the surviving partner has sufficient income to make ends meet. This can be their own income, but also a partner's pension. Naturally, you would prefer to leave your partner without any financial worries.

Death Benefit Insurance

Many couples who buy a home together choose to include term life insurance when they take out a mortgage. With term life insurance, you ensure that your dependents receive a pre-agreed amount of money from the insurer if you die before the insurance policy expires. This ensures that your dependents have more financial security and can cope with the loss of your income. With this amount of money they can, for example, continue to live in the current home, pay the fixed expenses or pay off outstanding debts.

Taking out death benefit insurance? Get in touch with us!

Term life insurance premium increasingly affordable

Life expectancy in the Netherlands has risen sharply in recent decades and is still rising. The average life expectancy for both men and women is currently above 80 years. As a result, the likelihood of someone dying during the term of their mortgage is also decreasing. As a result, death benefit insurance premiums have become increasingly affordable. Even if you already have term life insurance, it can be rewarding to have your current insurance policy compared. You may be able to get the same insurance at a lower premium somewhere else.

Funeral Insurance

Did you know that a funeral in the Netherlands costs an average of €7,500? This may seem like a high amount, but a funeral involves a lot of costs, such as the coffin, the farewell service, the burial, transportation, funeral cards, flowers and catering. Therefore, it is wise to start saving now for a funeral. This can be done by putting money away in a savings account or by taking out funeral insurance. Funeral insurance always pays out in the event of death. You can choose between in-kind insurance and endowment insurance. A combination of both is also possible with some insurers.

With in-kind insurance, you don't insure an amount, but a package of products and services. Your dependents can choose from a number of options offered by the insurer. With capital insurance, you insure a pre-agreed amount. This amount is paid to your next of kin upon your death. They can then arrange your funeral according to your wishes.

Taking out funeral insurance? Get in touch with us!

What is the best kind of insurance?

Perhaps you're still hesitating about taking out life insurance and/or funeral insurance. Which insurances are convenient for you depends, among other things, on your age, your family situation and the savings you have. Our financial advisors are happy to think along with you. With their knowledge, they can help you make the best choice. Please contact us for tailor-made advice.