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The capital funeral insurance contract: definition, explanation

Do you want to spare your loved ones the worry of your funeral? This is a wise precaution for your peace of mind, as the financial burden of the funeral is often significant for the family. Opting for the subscription of a funeral insurance contract in capital is a solution. What is a capital funeral contract? Amount of capital, beneficiaries, types of contributions, we explain the particularities of this pension product.

Why anticipate the financing of funerals?

Often taboo in France, discussing the formalities of your funeral with your loved ones is not always easy. Yet anticipating them during his lifetime brings serenity and tranquility. Your loved ones know your last wishes. Burial or cremation, organization of the ceremony, even organ donation, you inform them of your decisions. You thus relieve your loved ones, during this painful moment, of all organizational issues. You also save them all the financial burden of your funeral. How? By building up a capital during your lifetime, you anticipate the payment of your funeral with the guarantee of wishes respected. To compensate for the financing of your funeral, you can opt for the constitution of a personal savings or the subscription of a funeral contract in capital.

What is a capital funeral insurance policy?

A capital funeral insurance contract is a provident contract that is regulated by the same legislation as life insurance. With the subscription of this type of contract, you build up a capital during your lifetime by determining the frequency of payments and the amount of capital. You designate one or more beneficiaries to the contract who is responsible at the time of your death for paying for your funeral with the capital provisioned. The other possible formula is the funeral contract in personalized services. You build up a capital with an insurer and you choose the benefits of your funeral with a funeral company.

How to choose the amount of capital of a funeral contract?

On average, in France, the cost of the funeral is €4,000. However, the amount varies from one person to another depending on the type of burial, the choice of casket, and even the region of the funeral. To determine the capital needed for your funeral, request quotes from funeral homes. Their quotes are regulated and free. Provide a safety margin with an amount greater than the quotes provided. In principle, the capital is revalued each year in line with inflation. Throughout the duration of your contract, the capital can be reduced or increased and adapted to a new situation.

Who is the beneficiary of a capital funeral contract?

When subscribing to a capital funeral contract, you designate a beneficiary. It is a natural or legal person. The beneficiary receives the capital provisioned at the time of the subscriber’s death. Beneficiaries can be:

  • a family member;
  • A friend;
  • a funeral home.

Second-tier beneficiaries may be added in addition. Since a 2013 law, the beneficiary is obliged to use the capital for the subscriber’s funeral. He keeps the surplus for private use. The beneficiary is modifiable throughout the duration of the contract unless the beneficiary acts by amendment or sub-signature deprived his acceptance during the lifetime of the subscriber. In which case, you can no longer change it without his agreement.

How is the capital released upon death?

At the time of death, the insurer of the funeral contract pays the capital in principle within 48 hours. The beneficiary may decide to transfer the capital directly to a funeral home. He then signs a debt delegation agreement. To release the capital, documents are sent to the organization:

  • the original funeral contract;
  • the original identity card, passport or family record book;
  • the death certificate.

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What are the different types of contribution to a capital funeral contract?

The amount of the contribution of a capital funeral contract is fixed according to the age of the subscriber, the amount of capital and the revaluation rate charged to the contract. The younger the subscriber of a funeral policy, the lower the contribution. It is generally the 60-65 year olds who subscribe to this type of pension provision. Not being active during the payment period can avoid an additional burden in retirement. The contribution of a funeral contract in capital is of 3 types: single, temporary or life.

The one-time contribution of a funeral contract in capital

The capital is paid in a single instalment at the time of subscription of the contract. With interest, the earlier the principal is paid, the more the amount will be increased.

The temporary contribution of a funeral contract in capital

With a temporary contribution, the capital is built up in several installments on a monthly, quarterly or annual basis. The duration varies from 5, 10 or 15 years. Payments are revalued each year. This type of contribution is preferred for active and young retirees aged 45 to 65.

The lifetime contribution of a capital funeral contract

The lifetime contribution is to be chosen if you subscribe late to a funeral contract, beyond the age of 70. Moreover, the age limit for a subscription is often raised to 80 years by organizations. The contribution is paid monthly until the death of the subscriber. The amount of contributions, if the death is late, may exceed the amount of capital at a loss.

How to find a capital funeral insurance contract?

To obtain a capital funeral contract, membership is made with a bank, an insurer or a mutual. You can request quotes directly from institutions or use the services of a specialized broker. He searches on your behalf for the best offers according to your situation and needs. The other solution is to compare online offers with a free comparator. After filling out a form, you get different proposals from organizations present on the funeral insurance market. You then subscribe online without a medical questionnaire. To choose with peace of mind, remember to check:

  • the terms of payment of the capital;
  • the rate of revaluation of the capital;
  • the conditions of redemption, termination or modification of the contract;
  • the waiting period.

Like life insurance, a capital funeral contract allows you to anticipate the financing of your funeral. You choose the frequency of payments, the amount of capital and the beneficiary of the contract. You plan your funeral or those of your spouse according to your wishes and you save your loved ones during this painful moment of financial worries.

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