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What is the difference between a Sterbekasse and funeral insurance?

In short

What is the difference between a Sterbekasse and funeral insurance? In benefit, very little: both pay a fixed sum for the funeral, usually EUR 3,000 to 10,000. The difference lies in the legal form. A Sterbekasse is a small association owned by its members, may only pay up to the usual cost of a funeral and does not belong to the statutory protection fund.

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What it costs

Published premium examples. Sterbekassen and life insurers are in similar ranges; the individual tariff decides.

Example	Typical range
Age 60, EUR 5,000, no health questions, 24-month waiting period	about EUR 24 to 25 a month
Age 60, EUR 7,000, premiums until 85, 36-month waiting period	about EUR 35 to 39 a month
Age 65, EUR 7,000, 20 years of premiums, market range in a test	about EUR 39 to 53 a month
Age 65, EUR 3,000, 20 years of premiums	on average about EUR 20 a month

Guide values, October 2026, from publicly quoted tariff examples and test results.

That Sterbekassen and life insurers charge in similar ranges is a guide value from our quoting practice.

Your premium depends on age, sum, payment term and waiting period; we obtain quotes as a broker.

Worked example

Retiree, 65, with access to his former employer's Sterbekasse

He wants to secure EUR 7,000 for his funeral and compares the company fund with a tariff on the open market. The premiums are assumptions within the published range.

Sterbekasse, EUR 7,000, 20 years of payments (assumption)	EUR 39 a month
Funeral insurance, EUR 7,000, 20 years of payments (assumption)	EUR 48 a month
Saving over the full term	about EUR 2,160
Fund's assumed interest rate (assumption)	above the return its investments recently earned
Consequence under the statutes if money runs short	benefit may fall or contribution rise

The fund is cheaper but carries an open risk of cuts. He chooses the fund because the saving is large and keeps an extra EUR 1,000 in an account as a buffer. If the premium gap were small, the tariff with the protection fund would be the calmer choice.

What a Sterbekasse is

A Sterbekasse is a mutual insurance association (Versicherungsverein auf Gegenseitigkeit). There are no shareholders: the insured are members and own the association together. Surpluses stay with the members.

German insurance supervision law limits what Sterbekassen may do: only insure deaths in Germany, and the benefit may not exceed the average cost of a funeral (section 218 VAG). Many were founded by companies, cities or professions and only accept their staff and families. Others are open to everyone.

The Federal Financial Supervisory Authority (BaFin) supervises Sterbekassen just as it supervises life insurers.

What funeral insurance is

Funeral insurance is a small whole-life policy offered by a life insurer. Legally it is ordinary death cover with a low sum.

Life insurers must belong to a statutory protection fund (section 221 VAG). If an insurer gets into trouble, the fund takes over the contracts and continues them. Sterbekassen are not covered by this obligation.

Feature	Sterbekasse	Funeral insurance
Legal form	mutual association of its members	life insurer, often a stock company
Who can join?	partly only staff of a company or profession, partly everyone	everyone within the entry age
Maximum sum	average cost of a funeral	depends on the tariff, often EUR 15,000 and more
Statutory protection fund	no	yes
If money runs short	benefit cuts or higher contributions possible	protection fund steps in
Costs	often low when a sponsoring company runs the administration	acquisition and admin costs in the premium
Surpluses	go to members	mostly to policyholders, partly to owners

The main drawback of a Sterbekasse: cuts

Sterbekassen calculate with a fixed interest rate on the money they invest. In 2023 this rate was between 0.9 and 4 percent depending on the fund. If investments earn less, a shortfall arises.

The statutes then provide for reserves to be used first. If that is not enough, the fund can reduce benefits or raise contributions. This is stated openly in the annual reports, and you should know it before joining.

A high assumed rate is therefore not purely an advantage. It makes the premium cheaper, but it also has to be earned in the markets.

Where a Sterbekasse is strong

Company Sterbekassen often run very lean because the sponsoring company provides premises and staff free of charge. There are no commissions and no shareholders. That can show in low contributions.

If you have access to such a fund as an employee or retiree, look at its tariff and its latest annual report. Check whether the assumed interest is actually being earned.

If you are new to Germany

A Sterbekasse only insures deaths in Germany. If you may be buried in your home country, check the cost of repatriation separately. Some funeral insurance tariffs include it for a surcharge.

Statutory health insurance stopped paying a death grant in 2004. Neither a Sterbekasse nor funeral insurance is part of the state system.

When you need neither

If you keep the cost of a funeral in an account you do not touch, you need neither a Sterbekasse nor funeral insurance. Over the years both often take in more in contributions than they pay out.

They make sense if you do not have the money at once, want to tie the sum firmly to the funeral, or want the full amount secured for your family after a short time.

Step by step

Check whether your employer, city or profession gives you access to a Sterbekasse.
Set the sum according to funeral costs where you live, or repatriation costs.
Compare premium, payment term and waiting period of fund and insurer side by side.
Read the fund's latest annual report: assumed rate, investment return, reserves.
Check in the statutes what happens if money runs short.
Compare total premiums until the end of payment with the sum insured.

Checklist

Admission conditions of the fund met
Annual report and statutes read
Assumed rate compared with investment return
Waiting period and benefit during it clarified
Total premiums calculated
Beneficiary named

Common mistakes

Believing a Sterbekasse is a state benefit or legally guaranteed
Looking only at the low contribution and ignoring the risk of cuts
Assuming a Sterbekasse can pay any sum you like
Not reading the annual report although it is publicly available
Taking out a second contract although the company fund already covers the funeral

Questions and answers

Frequently asked

Is a Sterbekasse safe?

It is supervised by the state but does not belong to a statutory protection fund. If money runs short, its statutes may allow benefit cuts or higher contributions.

Can I join any Sterbekasse?

No. Many only accept staff of a company, city or profession, often with spouses. Others are open to all.

Is a Sterbekasse cheaper?

Often, because there are no commissions or shareholders and sponsors run the administration. It is not guaranteed; compare the actual tariff.

Is there a waiting period at a Sterbekasse?

Usually yes, as with funeral insurance. Some tariffs waive it if you answer health questions.

What happens to my membership if I change employer?

In many company funds membership continues. The statutes decide, so ask before you move.

Is a Sterbekasse the same as the death grant from health insurance?

No. The statutory death grant was abolished in 2004. A Sterbekasse is private provision.

Sources

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