Grave, headstone, funeral service, and grave maintenance – these are just some of the costs that burden the bereaved when a loved one has passed away. And these costs can quickly add up and overwhelm those affected. 'Many relatives are relieved to hear that the deceased had made provisions and had taken out an insurance policy during their lifetime,' says Jens Leder, one of the three board members of the VVaG – mutual insurance association – Vorsorgekasse Hoesch Dortmund (VKH), an insurance company. Just like 100 years ago, individuals who take out insurance with VKH based in Dortmund become members of the insurance association, which prides itself on solidarity, security, and performance strength – and has done so since 1923.

100 Years of Solidarity

This year marks exactly one hundred years since the provident fund was established to grant death benefits to Hoesch workers. "Initially, the fund was meant to provide support to the families of colleagues in the event of death, because back then the death of a worker brought great financial difficulties for the family – and in principle, this basic idea is still behind the death benefit insurance today," explains Jens Leder.

Over the years, insurance has undergone major changes: the pay-as-you-go system was replaced with actuarial contribution payments, and in 1969 the scope was extended to the entire workforce of the Hoesch Group. VKH received a significant boost in 1988 when it also opened as a burial fund for non-group members.

Today, the solidarity community of 1923 has grown into the largest burial fund in Germany—with 110,000 members and an annual balance sheet total of 280 million EUR. "We remain an independent company to this day, and as a mutual insurance association, we only belong to our members. We don't have any shareholders, we don't have a consortium that owns shares, but rather one joins by concluding the insurance," says Jens Leder.

Specifically about burial costs

In the insurance market, VKH manages to maintain its ground successfully, but particularly sales are challenged to bring closer to potential customers the insurance and its possibilities. "Most are confronted with the topic of dying, and indirectly with a burial cost insurance, only when their own parents pass away. If they have prepared for their funeral, the bereaved are very grateful and start considering insurance for themselves," emphasizes Jens Leder. "One has to simply say that burial cost insurance is not really a sexy product. This requires one to deal very specifically with one's own death, and few people like to do that. Therefore, deciding to engage with a new mobile phone contract or similar is obviously much more exciting. Yet, the insurance model is very simple." Interested parties can preview and calculate tariff models on the homepage.

Cost-effective to the right tariff

"The burial cost is not a fund-linked life insurance but a normal tariff with guaranteed insurance sum. The earlier I pay in, the cheaper it gets. I can pay monthly, semi-annually, or annually or make a one-time payment," says Jens Leder. "Also, I can determine the duration—whether I want to pay only until age 65 or until 85. Of course, there are always voices saying that you pay in more than the beneficiaries get out, but I do not accept that. If I pay in at 65 and die early, then a high insurance sum may still be paid out. If a contributer becomes very old after 65, it can indeed happen that he has paid in more. Moreover, models where one starts at a young age are very cost-effective. All this has to be considered on a case-by-case basis. However, it is important not to lose sight of the purpose—the burial costs and the financing of the funeral."

The burial cost insurance enables a dignified funeral without burdening the bereaved. "Of course, people will always die, but many have specific wishes for their funeral. This helps the bereaved to implement these with the money from the burial cost insurance."