A dignified burial of a loved one can cost so much money that a funeral loan has to be taken out. In some cases, the cost of a funeral exceeds the personal financial framework and is in the four-digit range by 5,000 USD and more.
If the financial cushion is missing
Only if the deceased has taken out life insurance or life insurance does the cost of the burial not have to be covered. The last honor should be given with dignity and according to the deceased’s wishes. For some families, however, this means taking out a funeral loan. Many are quick to take out a loan under these conditions.
Nevertheless, the conditions should be checked carefully beforehand. Many funeral directors already work with different banks, so they check for themselves whether the survivors are creditworthy in order to be able to guarantee a loan accordingly. This is usually completed in the amount of the funeral sum and can be paid off within a few months or years. The rate of the loan is adjusted to the financial circumstances of the surviving dependents.
Death insurance helps preventive care
However, personal provision should be made so that relatives do not have to be given the choice of taking out a funeral loan. The right death insurance can be taken out even if there is only a low income or a small pension. Their need is even greater today because the state death benefit has already been abolished.
The insured person can determine how high the sum insured should be when concluding the contract. The insurance company also records which funeral home will carry out the funeral and which framework is appropriate for this. However, many find it difficult to think about these processes. Death benefit insurance can be taken out into old age, even without having to answer health questions. Only those who have failed to provide for their relatives face funding for a funeral.