Do I get the funeral insurance payout if I renounce the inheritance?
In short
Yes, if you are the named beneficiary of the funeral insurance (Sterbegeldversicherung). The payout is then not part of the estate, and renouncing the inheritance changes nothing. If the policy names the heirs, section 160 (2) VVG expressly says that renouncing has no effect. Without any beneficiary, the money falls into the estate and is lost to you when you renounce.
Guide values from published tariff examples and guides in Germany.
Example
Typical range
Funeral insurance, starting at 60, EUR 7,000
about EUR 35 to 39 a month
Funeral insurance, starting at 70, EUR 7,000 to 8,000
about EUR 54 to 63 a month
Cremation with an urn grave
often EUR 4,000 to 6,000
Burial in a family plot
quickly EUR 8,000 to 12,000
Guide values as of October 2026 from published tariff examples and guides.
The amounts in the worked example are a guide value from quoting practice.
Worked example
Daughter renounces an estate in debt
The father leaves EUR 25,000 of debts and hardly any assets. His funeral insurance of EUR 8,000 names the daughter as beneficiary.
Debts of the estate
EUR 25,000
Daughter renounces
no liability for the debts
Payout to the daughter
EUR 8,000
Cremation she arranges as a relative
about EUR 5,000
The daughter is not liable for the debts, receives the payout and can pay for the funeral from it. Without a named beneficiary, the EUR 8,000 would have stayed in the estate.
The beneficiary decides
Funeral insurance is a small life insurance policy. The policyholder decides who gets the money. A named beneficiary (Bezugsberechtigter) acquires the right to the benefit at the latest on the death, section 159 VVG. The money goes straight to them and is not part of the estate.
If the policy says the heirs are beneficiaries, those who are heirs at the time of death are entitled in case of doubt. Renouncing the inheritance has no effect on this, section 160 (2) VVG. Only if nothing is specified does the insurer pay, under usual terms, to the policyholder or their heirs, and then the payout is part of the estate.
Entry in the policy
Payout after renouncing
You by name as beneficiary
you get it
The heirs as beneficiaries
you still get your share
Funeral director as beneficiary
goes directly to the funeral director
No beneficiary
falls into the estate, no longer yours
Why people renounce an inheritance
People usually renounce because the estate has more debts than assets. Heirs are liable for the deceased's debts. You must renounce within six weeks of learning of the inheritance and the reason you are an heir, section 1944 of the German Civil Code (BGB). If the deceased lived only abroad or you are abroad when the period starts, it is six months.
That is when funeral insurance with a named beneficiary is valuable: it stays with you, and the estate's creditors cannot reach it.
You may still have to arrange the funeral
Under section 1968 BGB the heir bears the funeral costs. If you renounce, you are no longer an heir and escape that duty under inheritance law. But the duty to arrange the burial under the burial law of the federal state remains if it names you as a close relative.
That is exactly what the payout is for. A funeral costs EUR 4,000 to 12,000, and a typical sum of EUR 5,000 to 10,000 often covers a simple burial. If you cannot bear the costs, the social welfare office pays the necessary costs where you cannot reasonably be expected to, section 74 SGB XII.
Naming the funeral director directly
Some people name the funeral home as beneficiary in their funeral insurance or assign the payout to it, together with a pre-arranged funeral contract. The money is then tied to the burial, whoever inherits or renounces.
What to check before renouncing
Ask the insurer who is named as beneficiary. That tells you within days whether the payout stays with you. Report the death without undue delay and send the death certificate and the policy document.
Renouncing cannot simply be undone. Check the estate calmly, but within the six weeks.
When the question does not matter
If the estate is not in debt, there is no reason to renounce. You then receive the payout as beneficiary or as heir, and the funeral is paid from the estate and the payout.
Step by step
Ask the insurer who is named as beneficiary.
Report the death and send the death certificate.
Check the estate: assets against debts.
If it is in debt, renounce within six weeks.
Commission the funeral and pay it from the payout.
If the money is not enough, apply to the social welfare office for the burial costs.
Checklist
Beneficiary confirmed in writing
Deadline for renouncing noted
Quote from the funeral director obtained
Receipts for all payments kept
Common mistakes
Assuming renouncing also loses the funeral insurance payout
Letting the six week deadline pass
Believing that without inheriting you need not do anything
Not naming a beneficiary when taking out the policy
Questions and answers
Frequently asked
Do I get the payout if I renounce and the estate has debts?
Yes, if you are the named beneficiary or the policy names the heirs.
The estate's creditors cannot reach this money.
What if no beneficiary is named?
Then the insurer pays the heirs, and the payout is part of the estate.
If you renounce, you do not get it.
Do I have to pay for the funeral if I renounce?
Not as an heir.
As a relative obliged under state burial law, you still have to arrange the burial.
Can I use the payout for the funeral?
Yes.
It belongs to you, and you can pay the burial with it.
