Q: Erasing iphone6

If you remove it from FMI, you won't be able to erase it. So, erase it first.

Erasing it will erase everything.

It is recommended that you prompt your iPhone to erase as you are seeing in your options there. After which choose to Remove iPhone from your account. This may take some time to appear as an option or require you to turn your device off to access.

Your insurance will require that you have removed your iCloud account from the non-working device to replace it, or you may be subject to some pretty outstanding fees.

This process, for security reasons, will delete your Apple Pay cards, so you will need to reprogram those with your next iPhone.

Consider like you were "gifting" it to the insurance provider. So: What to do before selling or giving away your iPhone, iPad, or iPod touch - Apple Support

Courcoul wrote:

 

Consider like you were "gifting" it to the insurance provider. So: What to do before selling or giving away your iPhone, iPad, or iPod touch - Apple Support

^ Yes, precisely.