Why funeral insurance premiums rise and how to switch or cancel

Terms used

• Decesos — Decesos is funeral insurance, which pays for or arranges your funeral and related services.
• Prima natural — A prima natural (or creciente) is a premium that rises as the insured person gets older.
• Prima nivelada — A prima nivelada is a level premium fixed on your entry age, higher at first but steady over time.
• Prima única — A prima única is a single premium, paid once for lifelong cover.
• Valor de rescate — The valor de rescate is the cash value a policy pays if you cancel it.
• Reducción — A reducción turns a policy into smaller cover that needs no more premiums.
• Antigüedad — Antigüedad is the seniority you build up by holding a policy for years, which you lose when you switch.
• Carencia — The carencia is the waiting period after a policy starts before some cover applies.

Key rules

• Premium type: Rising premiums are cheapest now and dearest in old age, while level and single premiums cost more at the start.
• Premium change notice: The insurer must warn you of a premium change at least two months before the policy period ends.
• Cancel notice: Give written notice at least one month before the policy period ends to stop it renewing.
• Switching: Moving insurer means a new contract, lost seniority and usually a new waiting period.
• Missed premium: You get a one-month grace period with cover continuing, and the insurer may end the contract if it is unpaid within six months.

The premium type decides what you pay in the long run

A cheap premium today can be an expensive one in twenty years. Funeral insurance (decesos) is sold with three structures, and which ones you can choose depends on the insurer.

• Rising premium (prima natural or creciente). The premium goes up as you get older. It is cheap when you are young and expensive in old age.
• Level premium (prima nivelada). The premium is fixed on the age you join and stays constant in real terms. It starts higher than a rising premium. It is usually indexed to inflation (the CPI) or to a fixed yearly percentage.
• Single premium (prima única). You pay once for lifelong cover. It costs the most up front and avoids age-related rises completely.

Some insurers also offer a limited payment period, for example paying until age 65 or 70. Level and single premiums cost more at the start, but they avoid the climb that rising premiums bring.

Why your premium goes up

Three things push a premium up:

• Moving into a higher age band on a rising-premium policy.
• Yearly indexation of the premium and the sum insured, tied to the CPI or a fixed rate written in your contract.
• A rate revision by the insurer at renewal.

The insurer must tell you about a premium change at least two months before the end of the policy period. If you do not accept it, you can cancel. Check the indexation terms in your own contract. If you disagree with a change, start with the insurer's customer service. After that you can go to the insurance regulator (the DGSFP) or to the courts.

How to cancel

Decesos policies are usually annual and renew automatically. To stop a renewal, give written notice at least one month before the end of the current policy period. Use a registered letter, a burofax or another method that proves the insurer received it. Many insurers also accept email or a visit to an office. Check your renewal date in the contract.

Will you get money back?

Usually not. A rising-premium policy has no surrender value (valor de rescate). Cancelling returns nothing beyond any unused premium for the current period.

Level and single premium policies build up a reserve. They may pay a surrender value, or let you keep a smaller paid-up sum (reducción). This depends on the policy conditions, often needs a minimum number of years, and is usually cut by charges. Look for the rescate and reducción clauses in the general conditions, and ask the insurer for the reserve figure. If you have paid for years into lifelong level cover, cancelling can lose you that accumulated value.

Switching insurer means starting again

You cannot transfer a decesos policy. A move means a new contract, and you lose your seniority (antigüedad).

• The new insurer prices you on your age today, so the premium is usually higher than an old long-held one.
• A new waiting period (carencia) normally applies. It is commonly a few months for natural death and often a year for suicide. Accidental death is often covered at once.
• Some insurers waive the waiting period if you prove prior cover, but that is their choice.

Do not cancel the old policy until the new one is in force. Compare waiting periods before you decide.

If you stop paying

After a missed premium you have a one-month grace period with cover continuing. After that cover is suspended. If the premium is still unpaid within six months, the insurer may end the contract.

On a rising-premium policy, a lapse means all your seniority is lost. A level-premium policy with a reserve may be converted to a reduced paid-up sum, if its conditions allow. Reinstating a lapsed policy usually means a new waiting period and a new premium. The policy's own lapse conditions apply, so read them.

Where to go next

The decision, timeline, documents and warnings below help you choose between keeping, switching and cancelling. The checklist covers what to look for before buying.

Choosing between options

Should you keep your funeral insurance, or cancel and switch to another insurer?

• Keep the policy: Fits if you have held it for years: your premium is likely lower than a new one at your current age, and you keep your seniority and avoid a new waiting period.

• Switch to another insurer: Fits if the new price is clearly better even at your current age. It is a new contract, so you lose seniority and a new waiting period normally applies.

• Cancel without replacing it: Fits if you no longer want cover. Expect nothing back on a rising-premium policy, while a level or single premium policy may pay a surrender value.

Switch only if the new premium at your current age, plus the new waiting period, still beats staying. Start the new policy first and cancel the old one only once the new one is in force.

Timeline and deadlines

• Decide whether to accept the change or cancel before renewal: after you receive the notice and before renewal

• Pay a missed premium while cover continues: within the one-month grace period after the due date

• Insurer may end the contract if the premium is still unpaid: within six months of the missed premium

Documents you need

• Your policy contract, especially the conditions on renewal date, indexation, surrender (rescate) and reduction of paid-up cover. Your insurer issues it.

• The insurer's written notice of a premium change, which it must send before the end of the policy period. Keep it if you want to refuse the change and cancel.

• Written cancellation notice that proves receipt, such as a registered letter or burofax. Many insurers also accept email or delivery at an office. You write and send it yourself.

• The new insurer's policy confirmation showing that cover is in force, before you cancel the old policy.

What to check in a funeral insurance policy before buying

• Ask for the pre-contract information and the table of premiums by age (tabla de primas), so you can see how the premium changes over the years.

• Find the premium type in the condiciones particulares (the page with your own details): rising with age (prima creciente), level (prima nivelada) or single, paid once (prima única).

• Compare the cost today with the cost later: rising premiums are cheap when young but expensive in old age, while level and single premiums cost more up front and avoid age-related rises.

• Check the revaluation or index in the condiciones particulares, such as a link to inflation or a fixed yearly percentage, and any option to stop paying at age 65 or 70.

• Confirm in the condiciones particulares that every person you want covered is listed as an insured person, with the correct age.

• Check whether repatriation of remains abroad is included or sold as an optional extra for a higher premium, and what distance of free transfer within Spain applies.

• Read the condiciones generales for the exclusions and the waiting period before cover starts.

• Check the sum insured or service tier (coffin and ceremony quality), and ask which costs above it, such as a niche or cemetery fees, your family would pay.

• Look in the condiciones generales for the rules on lapse, cancellation and surrender, and ask what you lose if you leave a lifelong level-premium policy.

• Note the renewal date and how to give written notice by registered letter, burofax or another method that proves receipt.

• Make sure any limitative clauses are highlighted and signed separately, and read the health questionnaire before you sign.

What to watch out for

• Cheap premiums now can become expensive later: On a rising-premium policy, the price goes up as you move into older age bands, and yearly indexation adds more. Level and single premiums cost more at the start but avoid age-related rises. Compare the cost today with the cost in old age using the premium table by age before you choose a structure.

• Cancelling may return nothing: Most rising-premium policies have no surrender value, so you get back only any unused premium for the current period. After years of paying, you leave with no money and no seniority. Look for a clause on rescate or reducción in the general conditions and ask the insurer for the reserve figure before cancelling.

• Paying for lifelong level cover can lose value: If you cancel a level-premium policy you have paid into for years, you may lose the value built up. Ask whether a reduced paid-up sum is available instead of cancelling.

Frequently asked questions

Will I get money back if I cancel my funeral insurance?

Usually no, because most rising-premium policies have no surrender value (valor de rescate), so you only get back any unused premium for the current period. Level or single premium policies build up a reserve and may pay a surrender value or a reduced paid-up sum, often after a minimum number of years and less charges.

Can I move my funeral insurance to another insurer and keep my seniority?

No, there is no portability for decesos in Spain, so a new insurer means a new contract and you lose your seniority (antigüedad). The new premium is based on your age at entry, and a new waiting period normally applies. Keep the old policy running until the new one is in force.

How long is the waiting period on a new funeral insurance policy?

It is commonly a few months for natural death and often a year for suicide, while accident death is often covered at once. Some insurers waive it if you prove prior cover, but that is their own choice. Compare waiting periods before you switch.

What happens to my policy if I stop paying the premium?

A rising-premium policy simply lapses and you lose all seniority once the grace period passes.