Can the social welfare office touch my funeral insurance in Germany?
In short
The social welfare office (Sozialamt) in Germany can only touch your funeral insurance if it is freely usable and your assets exceed EUR 10,000 per adult. If the policy is reasonable and tied to your burial and grave care, the Federal Social Court treats cashing it in as undue hardship, so it is usually protected. Taking out a policy just before applying for benefits can backfire.
Statutory amounts under SGB XII and guide figures for funeral costs, as of October 2026.
Example
Typical range
Protected amount per adult
EUR 10,000
Married couple together
EUR 20,000
Extra per mainly supported dependant
EUR 500
Average funeral in Germany
about EUR 5,000 to 10,000
Funeral insurance, EUR 7,000, starting at 70
about EUR 56 to 63 a month
The protected amounts are set by the regulation on § 90 paragraph 2 number 9 SGB XII,
valid since 1 January 2023.
Funeral costs and premiums are guide values from published examples.
Whether your policy is protected is decided by the Sozialamt case by case.
Worked example
Widow, 82, moving into a care home
Her pension and care insurance do not cover the home. She applies for help with care costs. This is how the office calculates with and without earmarking.
Savings account
EUR 8,000
Funeral insurance, EUR 7,000 sum, surrender value
EUR 5,500
Without earmarking: total assets
EUR 13,500, EUR 3,500 above the limit
Assigned to an undertaker
only the savings count, EUR 8,000
Without earmarking she must pay EUR 3,500 herself first, cancelling the policy if needed. With a reasonable policy tied to a funeral plan, it usually stays untouched.
What the Sozialamt checks
If you apply for social assistance (Sozialhilfe), basic income in old age (Grundsicherung im Alter) or help with care home costs (Hilfe zur Pflege), you must first use your own assets. Funeral insurance (Sterbegeldversicherung) usually has a surrender value and can be cancelled, so it counts as an asset in principle.
A basic amount is protected: since 1 January 2023 it is EUR 10,000 per adult. Older figures like EUR 5,000 that you still see online are out of date. Without special protection, the surrender value of your funeral insurance counts towards this amount.
Asset
How the Sozialamt treats it
Savings and current accounts
counts, EUR 10,000 per adult protected
Funeral insurance, reasonable and earmarked
usually protected under the hardship rule
Funeral insurance without earmarking
surrender value counts as an asset
Funeral plan with an undertaker and trust account
usually protected if reasonable
State subsidised pension savings (§ 10a EStG)
protected by § 90 paragraph 2 number 2
Why funeral provision can still be safe
Funeral provision is not on the list of protected assets in § 90 paragraph 2 SGB XII. In 2008 the Federal Social Court (Bundessozialgericht) ruled that it can be protected under the hardship rule in paragraph 3, covering money set aside for a reasonable funeral and reasonable grave care.
The court also set limits: what counts as reasonable depends on the services agreed and local prices. Anyone who signs a contract mainly to qualify for benefits must expect disadvantages.
When the Sozialamt can touch the funeral insurance
If the policy is not clearly tied to your funeral, the office just sees a contract with a surrender value. If your assets are above EUR 10,000, it can ask you to cancel and use the money first.
Sums well above a typical local funeral, or policies with a large savings element, also attract questions. A EUR 25,000 policy will make any office ask whether this is still funeral provision.
How to tie the policy to your funeral
Your funeral insurance becomes visible funeral provision when you sign a funeral plan (Bestattungsvorsorgevertrag) with an undertaker and assign the policy payout to them or name them as beneficiary. The money is then demonstrably meant for your funeral.
Keep the paperwork together: policy, assignment or beneficiary form, and the funeral plan with a list of services. The office decides case by case based on these documents.
Couples, children and when you need not worry
For married couples and civil partners the assets of both count together, so EUR 20,000 is protected. Children only have to contribute to their parents' care costs if their gross annual income is above EUR 100,000.
If your total assets including the surrender value are clearly below EUR 10,000, the Sozialamt cannot ask for anything anyway. The citizen's income (Bürgergeld) for people of working age has its own, different allowances.
Step by step
List all your assets, including the surrender value from the latest policy statement.
Compare the total with EUR 10,000 per adult.
Ask a local undertaker what a reasonable funeral costs.
Sign a funeral plan and assign the policy payout or name the undertaker as beneficiary.
Hand in all documents with your benefit application.
Checklist
Sum matches local funeral costs
Earmarking documented through assignment or beneficiary
Funeral plan with list of services in place
Policy not taken out just before the application
Surrender value and other assets added up
Common mistakes
Working with the outdated EUR 5,000 limit and spending money unnecessarily
Treating a savings life policy as funeral provision
Taking out a policy right before moving into a care home to hide money
Applying without proof of earmarking
Questions and answers
Frequently asked
Do I have to cancel my funeral insurance when I go into a care home?
Only if your assets including the surrender value exceed EUR 10,000 and the policy is not
protected as reasonable funeral provision.
If it is earmarked, the office usually cannot ask you to cancel.
How high can the sum be?
The law sets no fixed limit.
What matters is the cost of a reasonable local funeral and grave care.
Much higher sums are scrutinised.
Where do figures like EUR 2,600 or EUR 5,000 come from?
They are older protected amounts: EUR 2,600 applied until March 2017,
for example to people aged 60 and over,
and EUR 5,000 from April 2017 to the end of 2022.
Since 1 January 2023 the limit is EUR 10,000 per adult.
Will my children have to pay for my care home?
Only if one of them earns more than EUR 100,000 gross a year.
Below that, the office does not claim maintenance from them.
Does this apply to Bürgergeld too?
Bürgergeld under SGB II has its own allowances.
Earmarking your funeral provision still helps to justify the policy there.
