Funeral expenses insurance 2026: costs, waiting period & alternatives

An average funeral in Germany costs €6,000–10,000. Funeral expenses insurance provides an agreed sum so that your relatives do not have to pay for it. When choosing, look at the waiting period, premium stability and whether a health check is required.

Funeral expenses insurance (Sterbegeldversicherung) is a small endowment-type life insurance policy that pays a previously agreed sum (usually €3,000–15,000) to the surviving relatives on death. This pays for the funeral, headstone and memorial service without relatives having to step in financially. Unlike term life insurance (Risikolebensversicherung), it runs for life and is guaranteed to pay out.

• Waiting period – usually 6–36 months; in the event of accidental death, benefits are often paid immediately. Policies without a health check have longer waiting periods.
• Premiums for life or for a limited period – some policies stop premium payments at, for example, age 85.
• Premium guarantee – premiums should remain stable over the term.
• Health questions – policies with a health check are cheaper, but not available to everyone.
• Choose a realistic sum – an average funeral costs €6,000–10,000.

Above all for people who want to spare their relatives the funeral costs and decide on their own provision themselves. If you are still young and want to protect a family, term life insurance (Risikolebensversicherung) is usually the better choice. For seniors who specifically want to finance their funeral, funeral expenses insurance is the right solution – often without a health check, too.

The duty to arrange a dignified burial is regulated by the funeral laws of the German federal states. They name the relatives who are obliged to arrange the funeral, usually spouses, children, parents and siblings. Who ultimately bears the cost is governed by the German Civil Code: under § 1968 BGB the heirs pay for the funeral. If all heirs disclaim the inheritance, relatives who are obliged to arrange the funeral can still be asked to pay, because the duty under state law exists independently of the inheritance.

The death grant (Sterbegeld) paid by statutory health funds was abolished in 2004. If you cannot afford the costs, you can ask the social welfare office to cover them under § 74 SGB XII if paying cannot reasonably be expected of you. The review is strict, and existing assets and your relationship to the deceased play a role. This very uncertainty is one reason why people make their own provision and want to relieve their relatives.

Funeral costs depend heavily on region, type of funeral and cemetery. Items include the undertaker, coffin or urn, cemetery fees, the funeral service, headstone, flowers and death notices. A burial at sea, an urn burial and a coffin burial differ considerably in price. Obtain several quotes beforehand so that the sum insured matches your wishes and local prices.

Funeral expenses insurance is not the only way to provide for your funeral. You can put money aside yourself, for example in an instant-access savings account that you earmark for the funeral in your will or by power of attorney beyond death. This is flexible and requires no health questions. The drawback: if you die early you will not yet have saved the full amount, and during your lifetime the money is easily available for other purposes.

Undertakers also offer funeral pre-payment contracts. You set out your wishes and the services during your lifetime and pay into either a trust account or an insurance policy. Check how the money is protected, what happens if the undertaker becomes insolvent and whether you can cancel or change the contract. The consumer advice centres point out that funeral expenses insurance is often unnecessary if provision is made in another way.

Funeral expenses insurance, by contrast, has the advantage that the sum is immediately available once the insured event occurs, even if you had hardly any savings. It is particularly interesting for people who do not save with discipline or who want to play safe. Bear in mind, however, that you pay premiums for many years and, if you live long, may pay in more than is paid out. That is the price of certainty.

A worked example using freely chosen sample values that does not reflect a specific tariff: suppose a tariff with a sum insured of €8,000 costs €25 a month at age 55 with lifelong premium payments. That is €300 a year. After 20 years you have paid in €6,000, and after 27 years you reach the sum insured. If you die earlier, the insurance is cheaper than saving; if you live longer, you pay in more than is later paid out.

That is why the length of the premium period matters. With tariffs with limited premium payments, for example up to age 85, the obligation to pay ends but the cover remains. The calculation also depends on the profit participation: many tariffs increase the benefit through surpluses, but these are not guaranteed. Always compare the guaranteed benefit and the premiums, not the projected maturity value.

Also check how the waiting period works. If you die of an illness during the waiting period, many tariffs pay your relatives only the premiums paid in, sometimes with a surcharge, but not the full sum. In the case of accidental death the full sum is usually payable. Anyone taking out funeral expenses insurance without a health check accepts this restriction knowingly and should read it in the terms before signing.

You decide in the policy who receives the sum insured. This beneficiary designation (§ 159 VVG) can be revocable or irrevocable. It is best to name a person you trust who will take care of the funeral, because the payout goes straight to them and not automatically into the estate. Note that the beneficiary has to use the sum for the funeral, but the insurer cannot oblige them to do so.

Life insurance contracts carry a 30-day right of withdrawal from receipt of the contract documents (§ 152 VVG). Use this period to read the terms again in peace. Answers to health questions are subject to the pre-contractual duty of disclosure (§ 19 VVG): anyone who answers wrongly risks the insurer withdrawing from the contract. That would be especially bitter in the event of death, because the relatives could then be left empty-handed.

For tax purposes the payout to the beneficiary is subject to inheritance tax (§ 3(1) no. 4 ErbStG). For funeral, grave-care and estate-settlement costs, a flat-rate amount of €15,000 is deducted without proof as an estate liability (§ 10(5) no. 3 ErbStG), so in typical cases no tax is due. If the state pays in a case of care or need, appropriate funeral provision may be protected as exempt assets. In case of doubt, have this confirmed by a consumer advice centre or an advice service.