Taking out a funeral pre-planning policy is a responsible decision. However, it is essential to avoid pitfalls that can reduce its effectiveness or even undermine the protection it is intended to provide when your loved ones need it most.
1. An Underestimated Capital Amount: The Costliest Mistake
This is one of the most common pitfalls. Many people choose what seems like a reasonable amount when taking out a policy without considering the actual cost of funeral services. In Switzerland, a complete funeral can cost between CHF 8,000 and CHF 15,000, depending on the services selected.
A capital amount set 10 or 15 years ago, without an indexation clause, may no longer provide sufficient coverage. Your loved ones could then have to cover the shortfall themselves, precisely when they are most emotionally vulnerable.
What to check: Does your policy include indexation of the guaranteed capital amount in line with inflation or a reference index?
2. Lack of Personalisation: A Standard Policy for a Unique Farewell
Too many policies offer fixed packages without taking your actual wishes into account. Do you prefer burial or cremation? A religious, civil or secular ceremony? Repatriation arrangements in the event of death abroad?
A policy that has not been tailored to your preferences leaves these decisions to your loved ones. They may have to make arrangements under the pressure of bereavement, potentially choosing options that do not reflect your wishes. Funeral pre-planning is designed to give you control over these decisions during your lifetime.
3. An Incorrectly Designated Beneficiary: When the Money Does Not Reach the Right Person
Designating a beneficiary is a step that is often overlooked. However, vague wording, such as “my legal heirs” without further clarification, can lead to delays, family disputes or administrative complications at the worst possible time.
It is also common to forget to update the beneficiary designation following a divorce, remarriage or the death of someone originally named. As a result, the capital may not reach the person responsible for organising the funeral.
4. Ignoring the Rising Cost of Funeral Services: A Real Concern in Switzerland
In Switzerland, the cost of funeral services has increased in recent years due to higher service provider fees, administrative expenses and transportation costs. A policy taken out without an adjustment mechanism may gradually lose its purchasing power.
Without adequate protection against rising costs, the guaranteed amount may no longer cover the services originally anticipated. Reviewing your policy periodically and checking whether the capital can be adjusted helps ensure that your coverage remains appropriate over time.
Funeral Pre-Planning Deserves Careful Consideration
Taking out a funeral pre-planning policy requires careful thought. Check the guaranteed capital amount, make sure the services reflect your personal wishes, designate your beneficiaries clearly and verify that your coverage offers protection against inflation.
Would you like to review your current arrangements? At Azur Prévoyance in Geneva, our advisers can review your existing policy or help you choose a solution that suits your needs and circumstances.
Book your free appointment — with no obligation and complete confidentiality.