Is the benefit of a funeral insurance policy free to spend?

Funeral insurance is one of the most interesting insurances if you also think about the future. After all, with such insurance you save both yourself and your loved ones from a lot of (financial) and other headaches after your death.

This insurance means you pay a monthly premium to build up an amount of money that will be released when you die. This amount can then be used by your loved ones to make arrangements for your funeral. However, many people wonder if that amount is free to use or not. Below you will get an answer to this and other, related questions with the main question is the funeral insurance benefit free to spend?

Is the benefit of a funeral insurance policy free to use?

From the moment you die, the insurer with whom you took out funeral insurance pays out the accrued, insured amount to your loved ones to finance your funeral. Contrary to popular belief, however, that amount cannot be freely used.

This means that your next of kin cannot use the money for just about anything, such as personal purchases. After all, this is not an inheritance, but a sum of money intended solely to finance the funeral itself.

On the other hand, some insurers do have specific exception rules. For example, a terminally ill patient may receive an early payment for free spending. Thereby, it sometimes happens that next of kin are allowed to spend and part of the amount freely. The norm, however, is that the sum paid out is only intended to pay for the funeral and everything that comes with it.

So is there never a free to use amount with funeral insurance?

Although in most cases there is no free to spend amount available to the next of kin, depending on the type of insurance you have taken out, it is possible to choose a package of services.

Natura insurance, for example, involves a predetermined package of services and products that are delivered, arranged and paid for by the insurer. Sometimes it happens that next of kin and the policyholder may choose what that package entails and by whom they have those services or products delivered or arranged.

This may include discounts on specific services and products related to the funeral. This is often true if there is an agreement between the insurer and the company or organization providing the products and services.

All of this is often described by the term "free to spend," although so there are limitations. If you have taken out Capital Insurance, then there is a fixed sum of money and in this case there is little or no room for movement for the next of kin. The sum can then only be spent on the funeral itself.

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Last updated: 19-12-2022

Financially certainly.