Is funeral insurance worth it?

Feb 02, 2010

People throw money into the grave at every funeral and families are left with huge debts afterwards. Insurance experts propose funeral insurance as a way out to deal with the cost. Will tradition embrace the funeral policy package?

This is the final resting place of a young man. Family and friends are in their black outfits, bidding him farewell. His coffin is laid to the four meters depth and the wreaths are thrown. The expression of pain in the eyes of his family is intense, the sorrow unbearable. The priest solemnly says the prayer and the songs echoes because of the quietness at the cemetery. His family will mourn for long, but the mourning will be longest because of the funeral debts incurred. Funeral causes debts to everyone involved

In Ghana, a funeral costs up to GHC 20,000 ($28.000). This includes video coverage, wreaths, obituaries, and then of course the coffin. Daniel Obiri is the owner of a coffin workshop at Teshie in Accra. He has been in the business for the past 20 years. Every day, he hammers nails on the different wood sizes to shape a new coffin. He has a variety in his workshop: they come in the shape of airplanes, bottles, pineapples, and even a bible. Most of Daniel's customers buy on credit, which has led him to incur huge debts owing to about GHC 1500 ($2.100).

But not only are the coffins expensive. Digging new graves and painting them for a new burial is also a cost. Therefore death, even though unavoidable, needs to be prepared well in time, insurance companies say. Trying to break the tradition Salamatu Ali, a funeral insurance expert, says, monthly contributions of GHC 5 ($7) for 10 years could save some immediate funeral expenses and can lead to family not incurring debts even when the bread winner is no more. But even for Daniel, to whom death is a daily reality through the coffin business, insurance for the education of his four children and his car are immediate priorities - not insurance for his funeral.

“If I had a will, I would have funeral insurance for my aged mother. But tradition in Ghana frowns on saving for bad events”, Daniel says. Insurance experts are however trying to break that traditional thought.

Esther Aidoo & Jessie Bawak