Too many costs, loss of contributions, lack of information for beneficiaries… A new study of 60 million consumers singles out funeral insurance, while more than 5 million French people have subscribed to a contract of this type.
Bad news for those who have taken out funeral insurance. According to a study by 60 million consumers, these contracts are far from being interesting. Too often, the insured contributes at a loss: his beneficiary receives less than the money paid, denounces the consumer defense association after analyzing 11 contracts.
Regularly denounced
Funeral insurance allows the subscriber to transfer capital to their loved ones to finance their funeral. Two types of contracts are the most common: the subscriber must pay monthly contributions for a period or until his death, the contributions are then called lifetime contributions.
More than 5.2 million French people have taken out this type of contract, compared to only 4.5 million in 2017, according to France Assureurs. Problem is, funeral insurance is regularly criticized. For example in 2015, 2016, 2019, 2021, and most recently in November 2023… Associations, regulatory authorities such as the Fraud Repression or the ACPR (the banking and insurance regulator) regularly warn about their lack of reliability .
Lifetime contributions are not recommended
A funeral contract is not a profitable investment, indicates 60 million consumers. According to our simulations, for the person designated to organize their funeral to have a sum of 5,000, a 62-year-old insured person will pay on average 6,490 if they contribute over ten years and 6,992 over fifteen years.
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The study particularly recommends against lifetime contributions, because with this type of contract the longer you live, the more risk you have of contributing wasted funds. And very often, the consumer defense association notes pressure from insurers to push subscriptions to these contracts.
Fees and lack of information
Other points of vigilance: the difficulty and the excessive costs of breaking this type of contract, the numerous fees often added by insurers (entry fees, management fees, on split payments or on the capital) or the lack of information from the beneficiaries of these contracts. The deadlines for receiving capital are also often a black point.
Funeral insurance: hidden costs and misinformed customers
Conclusion: It is often more profitable to put your money into a traditional savings product, estimates 60 million consumers.