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November 16, 2018

Even in death, insurers will still give you cover

REST IN PEACE: Police load a coffin in a hearse. Photo/Karuga wa Njuguna
REST IN PEACE: Police load a coffin in a hearse. Photo/Karuga wa Njuguna

He drew the wrath of Luhya elders in 2004 when he did the unthinkable: planned for his own funeral. But veteran politician Martin Shikuku was not doing it to stir trouble, he simply explained that he did not want his relatives and friends burdened with funeral costs, upon his death.

Several years down the line, more people in Kenya are now beginning to see the sense of funeral pre planning. In current harsh economic times, a sudden death as its often described in obituaries can be quite 'untimely' financially speaking. Because of this, insurance companies have spotted a business opportunity by facing this taboo subject with a myriad of funeral insurance covers in which the insured party's family will not be left with the huge bill that accompanies preparation for burial. “The growing trend is that a number of corporations, organizations and groups are requesting for funeral cover for their members as part of the insurance arrangements. Some are even extending this to spouses and children,” reveals UAP Kenya managing director Jerim Otieno.

According to insurance broker Joakim Obulukhu, the cover is usually offered for groups and as an extension to existing covers such as personal accident or medical insurance because it is a high risk. “It is a risk that will most definitely occur at some point and very expensive to cover hence the reason why most firms will want it bought by groups and not a single individual,” explains Obulukhu. All the insurance firms that offer it locally say that funeral insurance is most popular in Western and Nyanza regions and has started to pick up in parts of Eastern.

These could be due to the fact that the tribes that hail from these provinces are highly traditional when it comes to burial ceremonies and thus funeral related rites have been known to lead to big budgets and in some lavish spending. For instance, some clans in the luhya community believe that when an elder dies a bull or bulls must be slaughtered.

One bull currently could cost a family above Sh30,000. Also, among some communities, if a man dies and had never constructed his 'simba' or house at his parents' compound, it has to be built first before his body is taken home from the city for burial. A house constructed under such circumstances, notes 75 year old Samuel Omwera does not have to be perfect it could as well just be a symbolic makeshift structure. Such rituals are partly the cause of inflated costs of conducting a funeral in some regions of this country.

According to Insurance Regulatory Authority, as at 31st December 2011, life insurance companies reported total claims by death Sh 2.45 billion. This figure, IRA says, is inclusive of claims made under funeral covers. “In Kenya, the increased uptake of funeral covers is mainly attributable to increased awareness of insurance on the part of society, increased breakdown of social ties within the family unit and increased costs of funeral expenses,” explains the IRA.

Some of the firms that have vibrant funeral covers include Pan African life, UAP and Metropolitan life among others. Pan African life CEO Tom Gitogo says the cover includes a compensation both in kind and in cash. “Benefits in kind include funeral home fees, hearse, casket, obituaries, flowers, church venue and public address system. The funeral cash plan provides a cash lump-sum of either Sh100,000 or Sh200,000 on death of a policy holder or covered dependants,” explains Gitogo.

The Pan African cover allows the policy holder to cover their spouse and parents. On the part of UAP Life, different tailor made covers are offered under the funeral package targeting customers such as welfare groups, big corporations, SMEs, families and individuals. A significant difference between funeral cover and others offered by insurers is that its very easy to verify occurrence and because of that claimants are paid as fast as within a day or two of a claim being filed. “We mainly pay a selected amount of benefit to cater for funeral expenses that could range from coffins, funeral home charges, transport, obituaries and other related costs,”remarks UAP's Otieno. “This is paid within 48 hours of submitting claim supporting documentation so as to enable the deceased family finance the funeral costs.”

Rarieya Asin, a Kenyan working in high risk country Afghanistan scoffs at the idea of funeral insurance. “I might need it for my family maybe in case they 'go' before me and I dont want the burden of funeral fund-raising to befall me, but not for me!” Asin tells the Star. Asin explains that the reason why he would not consider buying his own funeral cover is not out of fear of jinxing himself but because he does not see the need in expensive or lavish funerals. “If I we're to have my way, when I die, I would prefer to-like the Muslims-be buried wherever death got to me at. Any rituals that cost money should not be performed on my lifeless body,” he cautions.

Asin adds: “I hope that at the time of my death I will still be having some decent clothes so if I have to be buried in clothes, no need for new ones!” The IRA notes that most people are becoming like Asin and thinking modern, hence the growing demand for these insurance covers. “The issue of death has always been a taboo topic in the African culture and mindset that is to be revered and respected. However, with the evolutionary transition from a 'pre-modern' or 'traditional' to a 'modern' society , there has been progressive breakdown of this mindset and death has become accepted.”

Employers have also found this cover handy. Those firms that have taken it for their employees say it helps to manage costs in the event of death. “Of course when death occurs, families look to the employer and ask themselves what is the company doing to help?” notes Kenya Bureau of Standards insurance officer Harriet Khanagwa.

Khanangwa says that the firm found it better to procure the funeral insurance rather than to be setting aside money all the time for welfare which used to cover such expenses. “They (employees) do not even see it as a taboo or jinx, they are very excited about it and feel that the company cares about them and their dependents.”

But as it is, insurance firms that offer this cover say that its mostly common among young people and married couples above 30. It remains to be seen whether eventually the older generation will embrace this product as most insurers launch aggressive market campaign to popularise it. Other African countries are yet to warm up to funeral insurance with the exception of South Africa where sense in the cover has overshadowed traditional beliefs to spur its growth.

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