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Funeral assurance provides new source of revenue

Stephen Mudiari | NATION Kenyans escort the hearse carrying remains of Prof Wangari Maathai.
Stephen Mudiari | NATION Kenyans escort the hearse carrying remains of Prof Wangari Maathai. 

Funeral homes are changing strategies as they seek to woo middle class families who are fast-adopting Western cultures.

An advertisement placed by one of the top 20 funeral homes in last week’s Daily Nation ushered what promises to be a revolutionary way for these service providers. The ad was marketing one of their products dubbed “funeral assurance”.

Previously, the funeral homes offered only preservation of corpses and transportation to final resting place. However, many have diversified. They now offer an all-inclusive package.

The ambiance in mortuaries has improved, the attendants are courteous and many funeral homes have hired receptionists and even have marketing departments.

Some boast of sleek hearses while a few offer horse-drawn hearses and alien things like bagpipe bands—a musical ensemble consisting of pipers and drummers.

The middle class is behind the society’s changing views on funerals following westernisation. People now want a say in the manner in which they will be buried. Some are opting to be cremated while others donate their bodies to medical institutions.

Even more bizarre requests will come as people get more eccentric with money.

The improvement in funeral services, however, comes at a cost.

A survey of the industry shows that charges have increased several-fold within the last five years.

The market has also attracted more investors and to remain afloat, funeral homes need to be innovative.

In this case, the funeral assurance product promises to “deliver you home” anywhere in Kenya when you die and all this at a modest annual fee of Sh2,400.

As the economy becomes harsher and people get busier, fundraising for funeral and medical expenses are drawing fewer participants.
Funeral assurance products may strike a good tune with many employers and some responsible individuals.

For employers, this may be a good and cheaper way to offset staff funeral costs. Personally, it may be a responsible thing to do.

If you work for 20 years and when you die, dependants have to seek money from friends to bury you, there is something wrong.

The product may, however, be unpopular since many people view death as a taboo.

Therefore, paying for your own funeral while alive may be seen as an ill omen. This is the reason less than one per cent of Kenyans have wills or sign organ donor forms. The product may also face financial hitches, a common problem in family-run businesses.

So what happens when the visionary or founder of such a funeral home dies? Will these homes or successors pay up what’s is due to those who have contributed?

To avoid this, some funeral homes are inviting new shareholders to widen ownership and hopefully outlive the founders. One of the biggest provider is mulling listing in the Nairobi Securities Exchange under the newly introduced small and medium enterprises segment.

More established firms, for example, those associated with medical institutions may beat the others in terms of this longevity. I will not be surprised if they too launch such a scheme in the near future.

A smarter move would be to link such products with life insurance policies. For insurers, purchasing a stake in such enterprises and adding “free funeral” may sweeten life policies and make them easier to sell.

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