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Funeral Insurance Debate: Why cash-based funeral plans are the future

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By Tose Gava


In this blog I want to explore the shortcomings of traditional funeral policies where the policyholder is rigidly tied to a particular funeral directors’ firm and are given goods and services on claim. Receipt of benefits also rigidly assumes that the policyholder dies within the policy-provider-funeral-director’s reach.

Critically, one’s policy should always speak to their needs and reality. Treating customers fairly means that the policy should suitably meet the needs of the policyholder. The policy should be suitable today, tomorrow, short-, medium- and long-term.

A change in the policyholder’s circumstances, be it location or personal preferences, should never leave them exposed. A funeral policy like Diaspora Funeral Cash Plan provides policyholders with a more certain future value and is uniquely different in that it provides immediate financial intervention to the bereaved family.

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The cash is paid within 24hrs of proof of death and there are a lot of reasons why a funeral cash plan is always a better cover:

Certainty of cover value

One of the biggest outcries about traditional funeral policies that give goods and services is that policyholders always get asked to top-up in order to access better value goods and services on claim.

The requests to top-up by funeral directors always leave bereaved families out of pocket at a time when their policies should be serving them. This is because, over time, the services or goods a policyholder is paying for are varied to a point one can’t even tell what they are paying for and, at the point of claim, the bereaved families find themselves with lower-end packages forcing them to top-up for better value. By buying some services, or say a casket, years in advance there is a chance it will get out of fashion or it becomes outdated if the policyholder is blessed with longevity. With a cash cover you know exactly what your policy gives you and with a policy like Diaspora Funeral Cash Plan which is a hard currency only cover, long-term value is to a degree hedged against inflationary loss of value and currency volatility. This also gives better certainty of what the policyholder will get on claim.

Overtime, the bulk of the claimants also get cash settlements that a far higher than the total premiums that they will have contributed.

Worldwide Protection Without Borders

This is possible simply because cash knows no boarder. A cash-based policy like Diaspora Funeral Cash Plan pays out US$/£/€/AU$/ZAR or any other currency of choice immediately on proof of death which guarantees the policyholder and their loved ones a dignified send-off no matter what or where.

Related Funeral Expenses

There are certain funeral expenses that traditional funeral insurance ignores, and they cause serious financial challenges for bereaved families, and these include things like food, drinks, utility bills, church service, family travel, probate costs, memorial service, tombstone and unveiling ceremony. Whilst going through bereavement a lot of people lose income because they can’t work, it’s a huge opportunity cost. With a good cash cover, one literally covers everything including household bills that may pile up during the funeral.

Location, Preferences and Choices are fluid

The reality of our lives today is that we live in an era of regional integration and globalisation, it is pretty much a global village. This makes people’s location, choices and preferences fairly fluid either by choice or by default. When your location or your preferences in terms of your final resting place changes, your funeral policy should always be versatile enough to adapt. A cash-based funeral policy is a protection without borders.

Transnational Cover for Transnational Citizens

An average person has become a transnational citizen, global villagers who belong to more than one society or nation. The complexity of transnational citizens’ cross-border protection needs means that a suitable cover that speaks to their reality is a cover which is equally transnational like a cash-based funeral policy.

Flexible and Versatile Cover

The biggest single shortcoming of traditional funeral policies provided by funeral directors is that they are very rigid. You are literally stuck with the cover provider and the assumption is that one is born locally, lives locally, dies locally and gets buried locally. Unfortunately, that is far from reality and a lot of people have lost cover due to international relocation. With a cash-based policy like Diaspora Funeral Cash Plan, one is assured that cash is king;  so, wherever, whenever or whatever you know that your cover will work, and your wishes will be honoured.

Relocate or Travel Faraway

Whether you relocate permanently or travel on holiday, cash knows no border, so your cover remains the same. There is no risk of losing your policy or being offered a meaningless cash equivalent by a funeral director. Right now, there is serious shortages of labour in developed countries and millions are being recruited and relocating with their families, leaving behind funeral policies that they paid for, for years. If those policies were cash-denominated, then the relocating policyholders would not lose anything because cash knows no border and therefore worldwide cover.

Repatriation or Reverse Repatriation, Burial Abroad, Cremation or Missing Person Presumed Dead

By the time one comes to pass away any of these outcomes are possibilities. You may even pass on in your country of origin and choose reverse repatriation to your diaspora country, the choice is yours and your cash policy covers that.

Diaspora Children Will Not Talk Repatriation

This a big reason to keep your funeral policy as cash denominated. Whilst first generation migrants may be fixated about repatriation, the children are more prescribed where they grew up and may never be repatriated. Cash means they could choose anything and could be anywhere in the world as they grow in their careers, and they will still be covered. With policies that treat customers fairly like the Diaspora Funeral Cash Plan children are covered for live and one needs not worry that they would get removed at some point.

Use Of Claim Money Not Restricted

The cash can be used for anything be it body repatriation, burial abroad, cremation, reverse repatriation to things like household bills, family travel, food, drinks, probate bills, holiday after funeral, memorial service to tombstone or unveiling ceremony.

The intrinsic value proposition in cash-based funeral policies makes it imperative that in the future all funeral policies are cash denominated and bereaved families buy goods and services from the best provider, funeral directors at the point of need. A cash-based policy treats customers fairly in all respects.

By Tose Gava is a UK Based Financial Advisor & Insurance Specialist; he writes in his personal capacity.