Background
Funeral insurance meets needs
The death of a loved one not only brings grief, but also leads to high costs. Next of kin pay an average of € 7,000 for the funeral. There is a chance that the next of kin will not have enough money to bear these costs at the time of the death of their loved one.
Funeral insurance takes away the financial worry surrounding the funeral. The insurer can also help arrange the funeral. The fact that funeral insurance meets a need is evident from the fact that approximately seven out of ten households have such insurance.
Innovation in the sector
In recent years, the sector has adapted to the changing needs of customers. Where some funeral insurers used to approach consumers on their own initiative for a sales pitch, they are now in line with the information needs of (potential) customers. The starting point is not the commercial interest of the insurer, but the demand of the customer.
The Covenant has the role of driving force in this renewal process. In addition, the Association offers affiliated funeral insurers a platform for the exchange of knowledge and experiences in order to jointly shape the renewal of the sector.
Initiatives
In recent years, the sector has made progress in areas such as
- The customer comes first
Funeral insurers are guided by the interests and needs of the client and are transparent about their intentions. Since the introduction of the commission ban (2013), they no longer pay commission to intermediaries who sell their products.
- Better information provision
Funeral insurers have made agreements about recording funeral wishes and the course of consultations. In this way, they can advise the customer properly and ensure that the insurance meets the funeral wishes.
- Attention to under- and overinsurance
Funeral insurance policies were usually taken out a long time ago. As a result, the insurance may no longer meet current funeral requirements. It is in the interest of the customer that insurers point out the risk of under- or overinsurance. Therefore, customers are informed about the coverage of their insurance in an objective manner and in general terms.
- Funeral insurance policies are now mostly surrenderable
Many funeral insurers allow customers to buy out their (in-kind) funeral insurance. In most cases, it is now possible to cancel the insurance prematurely and have the accrued surrender value paid out.
- Better collaboration with funeral directors
If next of kin choose a funeral director who is not affiliated with their insurer, this can lead to unforeseen costs. That is why the Association and the BGNU trade association have agreed in the Protocol 'transparency' for funeral directors and funeral insurers in kind that next of kin will be informed quickly and adequately about the financial consequences of their choice.
More initiatives by the Association and funeral insurers can be found in the brochure 'Innovation in the funeral industry'.
Views of the Covenant
In the opinion of the Association, the new European supervisory framework Solvency II takes too little account of the long-term obligations of funeral insurers. Full application of the rules has a substantial negative effect on the solvency of funeral insurers, without any benefits for the customer.
According to the Association, the professional competence requirements for employees of funeral insurers are insufficiently in line with practice. The 'Assets' module, which is mandatory for these employees, does not cover funeral insurance. That is why the Association argues that the module should be adapted so that it actually contributes to the professional competence of funeral insurance advisers.
Since the introduction of the commission ban (2013), the funeral insurance industry has adapted to the new situation and has successfully looked for new ways to provide the best possible service to its customers. The ban on commissions increases transparency in the market and is therefore in the interest of the customer. However, funeral insurers do experience bottlenecks in the elaboration. These will be addressed in the evaluation of the ban on commissions.
