A long name, but an important point: overlijdensrisicoverzekering is Dutch for “death risk insurance”.
In addition to this long name, the Dutch sometimes use the abbreviation ORV. O comes from overlijden (to die), R from risico (risk), and V from verzekering (insurance). In Poland, we usually talk about life insurance, life policy or death insurance.
The basic principles of ORV are quite simple. The insurance is taken out for a specified, often long period, e.g. 30 years or until the age of 75. The insured designates a beneficiary and the amount for which they want to be insured. Then, each month, they pay a premium set by the insurer.
If during the term of the contract (e.g. 30 years) the insured dies, the insurer should pay the beneficiary the amount written in the policy. The main purpose of life insurance is to financially secure loved ones in the event of one’s own death.
It often happens that ORV insurance is chosen by couples living together, for example. If one person dies and is not insured, the other person will have to earn all the costs related to running the household on their own. Thanks to ORV insurance, the loss of income due to the death of a partner does not lead to a significant deterioration in the financial situation of the widowed other half.
Taking out death insurance is also often required by banks that provide mortgage loans. It is a safeguard against the death of a client repaying a large loan.
There are different types of death insurance. You can choose one with a fixed premium and a fixed amount of insurance. You can also choose insurance with a decreasing premium and a decreasing amount that the beneficiary will potentially receive.
A bit like this: if I die when I’m 45, it’s better for my partner, who’s also 45, to get a larger amount. However, if I die at 70, my partner will also have fewer years to live, so she’ll be satisfied with a smaller amount.
Insurance companies apply an upper age limit. It is usually between 70 and 80 years. If the limit is, for example, 75 years, then life insurance can only be taken out by people who have not yet reached that age.
Overlijdensrisicoverzekering is a type of “life insurance” (levensverzekering), but in the Netherlands “life insurance” is a broader category that also includes other insurances, such as funeral insurance ( uitvaartverzekering ). It should be remembered that death insurance (overlijdensrisicoverzekering) is something different from funeral insurance . The latter only covers funeral costs.
In a death insurance contract, the insurer may stipulate that in certain situations you will not be entitled to it. This may apply, for example, to death by suicide or as a result of the beneficiary’s actions (Example: A husband has a life insurance policy in which his wife is named as the beneficiary. The wife kills her husband. The insurer refuses to pay the insurance to the wife because she contributed to the insured’s death).
Life insurance doesn’t have to be a huge expense in the Netherlands. If the policy amount isn’t high, you can buy it for a few or a dozen euros a month. It’s worth using various online comparison tools to find the best deal.
The premium amount may depend not only on age, policy amount and insurance duration, but also on health. Insurance companies require policyholders to fill out a health declaration. Serious chronic diseases or, for example, smoking usually mean a higher monthly premium – because the risk of premature death is also greater.
Up to a policy amount of EUR 328,131 (as of July 1, 2023), the insurer may only require the insured to complete a health declaration. If the policy amount is greater than EUR 328,131, the insurer may also require the insured to undergo an additional medical examination. The insurance company wants to be certain of the insured’s health, because the policy is high, so the financial risk for the insurer is high.
Insurance against the risk of death is a good way to take care of the financial future of your loved ones and provide yourself with greater peace of mind, insurance companies claim. It is usually not a big expense and of course it would be best if this insurance never had to be paid out.
However, no one knows when they will die, and premature death is usually a huge emotional and psychological blow to the loved ones. Thanks to ORV insurance, at least in these difficult times the loved ones will not have to worry about financial issues – argue the supporters of this form of insurance.