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Why funeral insurance is gaining ground, but WhatsApp fundraisers pay for burials
Despite signs of growing uptake, funeral insurance still faces several “perception-related challenges” stemming from mistrust, limited understanding and cultural beliefs.
Funeral insurance is slowly catching on in Kenya, but fundraisers are still doing the heavy lifting. It is often said that no one needs roses when the sun has gone down. Yet for the family and friends left behind, the pressure for roses keeps coming—along with a long list of expenses to bury their loved ones.
With or without funeral insurance, a largely unseen economy thrives on death. What was once a modest communal affair has grown into an industry with professional undertakers, casket makers, hearse fleets, printers, caterers, florists and event planners — each with a price tag. Few households are prepared for the combined cost when death strikes.
While funeral insurance uptake is slowly catching on, platforms such as WhatsApp and M-Changa have become first responders, raising millions for burials. M-Changa charges a 4.25 percent fee on the fundraised amount.
The situation in Kenya contrasts with West and Southern African countries such as Zimbabwe and South Africa, where funeral cover is a major class of insurance and has supported the growth of funeral-only insurance companies.
Why funeral insurance struggles to gain traction
Funeral insurance promises a predetermined cash lump sum to beneficiaries, typically within 24 to 48 hours after a claim has been filed.
Jacqueline Karasha, CEO of Sanlam Allianz Life Insurance Kenya, says there is “a lot of stigma” that comes with funeral insurance products and many people prefer to postpone thinking about death-related plans until after a death has occurred.
“In the prioritisation of Kenyan needs, a lot of people really value children's education more, and that is why education products are endearing to Kenyans. The culture is ‘When I die, my family will take care of me. They will figure it out. They will do fundraising.’ That is why even for the funeral of successful people, there is always a fundraiser,” said Ms Karasha.
APA Life chief executive Eric Wanting finds the contrast between Kenya and West and Southern African countries such as Ghana, Botswana, Namibia, Zimbabwe and South Africa striking when it comes to funeral covers. He says Kenya and many other East African countries have a persistently low uptake of funeral cover despite rising burial costs and a growing middle class.
“Ghana has one of the most amazing cultural responses to life insurance products because funerals are highly celebrated as community events and the members have embraced early planning. It is a market where families understand the value of preparing for the inevitable,” says Mr Wanting.
He says while the Kenyan insurance market is well established, with some companies dating back to the colonial period, products like funeral insurance are still mostly taken up by a small group of higher-net-worth individuals.
“In Kenya, there is a bit of a cultural resistance to the concept of funeral cover as a standalone product. In addition, there is a lot of community contribution to people’s burials, unlike in Ghana, where funeral insurance has become more mainstream,” says Mr Wanting.
Insurers say the slow uptake has pushed them to reposition funeral covers under softer names like last expense or lasting dignity and often bundle it with other policies to make it more palatable.
Many insurers say there has been more success in selling the cover as a group last expense — a funeral insurance product for registered groups like companies — as opposed to individuals.
Mr Wanting believes that culture is just part of the puzzle. Platforms such as WhatsApp have given more life to funeral fundraisers and less talk about insurance. Ms Karasha explains that social solidarity has slowed the uptake of formal risk-pooling mechanisms like insurance that provide faster and more reliable support.
“When we look at other markets in Africa, funeral insurance is actually the lead product for life insurance. In Kenya, we have not been very successful and it is largely, in our understanding as a business, two things: our positioning and culture. Largely as a country, death is something that we do not comfortably talk about,” said Ms Karasha.
In Zimbabwe, for instance, the regulator’s data showed the uptake of individual insurance products among the Zimbabwean adult population was at 22 percent by the end of 2023, mainly driven by funeral insurance, which accounted for 72 percent of those insured. The market has at least eight insurers that exclusively offer funeral assurance covers.
Numbers tell the story
Kenyan insurers offering funeral covers are being challenged to meet people where they already gather if they are to succeed in growing uptake. According to Mr Wanting, insurers should, for instance, distribute funeral cover through churches, community groups, workplace associations and co-operatives.
Mr Wanting points out that “there is a lot of traction in community groups and so it is always a question of how to partner with such entities to create value to customers.”
The country has similar structures, including saccos, merry-go-rounds, table banking and burial groups, which Mr Wanting says can be a good gateway for selling funeral insurance products. However, Ms Karasha says accelerating the uptake of insurance covers will require relooking at the packaging of the product and distribution.
Despite the low uptake, more insurers continue to roll out these covers while early entrants improve on theirs. Some funeral policies cover extended family members while others bundle this cover with life or medical insurance.
For example, Britam’s family funeral and group last expense plans offer sums assured of around Sh150,000 to Sh500,000, with premiums starting from about Sh770 a month.
Banks are also joining insurers in this product. Stanbic Bank’s Flexi Protect allows customers to customise their cover for up to 22 dependants, with premiums from about Sh500 per month. I&M Bank and GA Life provide cover of Sh100,000 to Sh200,000 per person.
Other insurers like Old Mutual and Pioneer Assurance also offer group last expense plans with benefits from Sh50,000, depending on the option chosen. APA funeral plan covers full funeral expenses for families, including parents and in-laws.
There is also a focus on diaspora-targeted products, given the growing number of Kenyans seeking work abroad. Equity Bank’s diaspora last expense cover and partnerships like Diaspora Meds with Old Mutual allow Kenyans abroad to secure dollar-denominated funeral benefits. This often comes with cash payouts within 48 hours and optional repatriation support.
How insurers are packaging funeral cover
Daniel Wang’endo, the operations manager at Geminia Life Insurance, says the uptake of standalone last expense policies for individuals had remained low for a long time until insurers started embedding them within investment products.
Geminia’s last expense cover offers payouts of between Sh50,000 and Sh500,000 to institutions or groups to cater for members and their named dependants’ funeral expenses.
“The growing uptake after the embedment suggests that most clients take up the product out of necessity rather than preference, with last expense often viewed as an add-on rather than the primary driver of purchase,” said Mr Wang’endo.
He says uptake has been slightly better in the corporate segment, largely because the premiums are met by employers to support workers during the death of their family members. In addition, organised groups such as chamas are also gradually warming up to the idea of group last expense covers.
Despite signs of growing uptake, Mr Wang’endo says the cover still faces several “perception-related challenges” stemming from mistrust, limited understanding and cultural beliefs.
“The notion that taking out a funeral cover may “invite death,” significantly reduces willingness to purchase it,” he said.
He wants Kenyans to realise that the traditional cultural setup, where burial rites were coordinated and catered for by clan members, has been disrupted amid growing expenses.
“This [traditional model] has been challenged due to urbanisation and individualism in the current population and calls for organised and predictable mechanisms to mobilise funds for taking care of funeral expenses,” he said.
Mr Wang’endo agrees with Ms Karasha that increased acceptance of last expense insurance will require embedding it within insurance products that people already know and value.
“Combining last expense coverage with investment products, motor insurance, or lifestyle-related offerings can make the purchase feel painless and more appealing. Kenyans can then appreciate its value over time rather than resist it upfront,” he said.
Britam General Insurance CEO James Mbithi said challenges with timely compensation and structure have contributed to the low uptake of funeral covers in the industry. The insurer is now deepening the use of technology to sell the cover.
“We have invested in consumer awareness and technology to drive efficiency in serving our customers. Our agents can sell on their mobile and with the right technology, claims can be settled within 24 hours following notification,” said Mr Mbithi.
“Simplicity of product and fast, easy and transparent claims settlement is needed to drive confidence from consumers and rebuild trust in the industry.”
Mr Wang’endo says repackaging of funeral covers should be followed by risk mitigation and financial literacy programmes in schools and making it compulsory for employers to provide group last expense covers.
“At a policy level, the government could consider making last expense coverage mandatory for all employers. Premiums are generally affordable, yet the benefits to families are significant,” said Mr Wang’endo.
However, Mr Wanting cautions that repackaging alone will not be enough unless insurers back it up with consistent settlement of claims within hours of customers lodging a claim. He adds that a funeral claim delayed for weeks or bogged down in paperwork pushes people back to fundraisers.
Trust and the claims problem
“If one has a funeral and someone needs to be buried within a week, we can't have a claims process that is going to go on for two months. If we can use biometrics for claims assessment and make that process as paperless and as seamless as possible, we can pay the claim within 24 hours,” said Mr Wanting.
But trust levels in Kenya’s insurance market are still low. Insurance Regulatory Authority data shows complaints against insurers have been rising over the past four years, hitting 1,962 in 2023 from 1,878 in the previous year.
Delayed settlement of claims took up 1,045 or 53.3 percent of the complaints, followed by 370 cases or 18.9 percent as denied claims and 227 (11.6 percent) being unsatisfactory compensation.
The complaints on delayed or denied payouts extend the mistrust of many people in insurance. According to Mr Wanting, people in Botswana sometimes hold multiple funeral policies because they trust the system.
“In Botswana, people take as many as four different funeral covers and back it up with a savings society. They understand the critical importance of having insurance that pays out in times of hardship and I think that that will become more of a common practice in the Kenyan market if we build the trust,” he said.
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