Switching to another funeral insurance policy
With funeral insurance you save yourself and your loved ones a lot of headaches, both on a practical and financial level. The earlier you take out such insurance, the better. On the other hand, it can happen that you are not satisfied with your current funeral insurance and want to switch to another one.
What are the options when switching funeral insurance and how exactly does it work? Read on quickly for answers to all your questions.
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Can you switch to another funeral insurance policy?
It is indeed possible to switch funeral insurance. Today, there are two possible paths for that:
Surrendering a policy or funeral insurance policy
Making your current funeral insurance premium-free
It is also possible to take out a new policy. The advantage of the first two options is that you do not have to find a new insurer. The third option involves so-called additional insurance, which is usually a good solution if the current coverage is not sufficient after taking out the first policy.
Purchasing a funeral insurance policy and making a current policy premium-free are still the most common options. What exactly do they entail and what are the advantages and disadvantages?
Purchasing a funeral insurance policy
The first option is to buy out your funeral insurance. In this case, the current coverage expires and therefore there is no longer an obligation to pay the monthly premium for the insurance. In certain cases, the policyholder is entitled to a so-called surrender value and then gets back a piece of the premium already paid, since he or she has already paid for the insurance for several years.
However, be careful when buying out a funeral insurance policy, because there are a number of drawbacks. For example, you lose money either way, since the surrender value when you cancel the insurance will always be less than the total amount of the premium you have already paid.
In doing so, you as a policyholder may have to pay additional fees for the switch. Finally, it is also no longer possible to transfer your current insurance to an alternative insurer that offers better terms.
Making funeral insurance premium-free
A second, commonly used method is to make the current funeral insurance premium-free. This means that the insurance itself remains active, but you, the policyholder, no longer pay a (monthly) premium for it.
Of course, this has some significant implications for the final premium payout once you pass away. After all, it will be a bit lower, since your insurer usually charges a fee for making your funeral insurance premium-free.
This amount can be determined in several ways:
- Based on a one-time fee
- A certain percentage of capital already accumulated