After writing my previous blog post on funeral pre-planning, a friend asked about my thoughts on final expense insurance. For those unfamiliar, it’s an insurance plan taken up for the purpose of providing for funeral related expenses, in the event of death of the insured. He was told by an insurance agent that funerals can be expensive and that he should plan for it.
Before proceeding to share my thoughts, I would like to state categorically that these are just my personal thoughts and do not in any way constitute financial or insurance advice.
You May Already Have Final Expense Coverage
It is worthwhile to note that such cover may have already been included in your Integrated Shield Plan under the PMIS Scheme. The amount of coverage (if any) varies among the different insurers as well as your plan type. Hence, if you are considering such coverage, it is best to first check your policy contract to determine how much cover you already have; it is usually listed under the description, final expense benefit.
Do You need More Such Coverage?
This is where my thoughts may differ from that of some insurance agents. A simple check on the cost of Funeral Packages in Singapore on this website: Funeral Services Singapore, reveals the following…
A funeral, held at a HDB void deck, can be staged for $6,500 or less, depending on it’s elaborateness and the duration of the funeral. Including buffering for some miscellaneous expenses, I would thus expect that at the time of writing (i.e. 7 November 2016), a funeral can possibly be held for under $8,000.
If a family cannot afford to fork out $8,000 for funeral expenses without the help of insurance proceeds, it may perhaps be more prudent for the family to consider spending less rather than more on a funeral, even if they have an insurance payout set aside for final expenses.
My personal thoughts are simple. The money saved can be better used to help the surviving family members get on with life.
I know that these thoughts may not go down well, especially in our predominantly Chinese society where the need to show filial piety sometimes result in families spending way more than what they can afford on final expenses. But if there is an afterlife, I sometimes wonder how the deceased will feel, if the family suffers unnecessary financial hardship after giving him an overly elaborate and hence, expensive send-off?
My Thoughts on Filial Piety
The average life expectancy of us Singaporeans, as at 2013, is 82.4 years. Hence, we have almost an eternity to show care and concern for our loved ones. This love and affection should thus be given during the deceased lifetime. Every moment with our loved ones should be cherished and treated as a blessing. Unfortunately, sometimes, because of our busy schedule, we tend to neglect those closest to us, only to feel utmost regret, when they unexpectedly pass on.
Clarifying My Position on Final Expense Insurance
I know my thoughts on this matter are at best controversial. But don’t get me wrong. I’m not against spending on funerals if the family can well afford it. Neither am I against the buying of more life insurance for the protection of dependents. To me, insurance should be bought for the right reason i.e. to provide for loved ones who must continue to live.
You have heard my thoughts on final expense insurance. What are your views? Do you agree or disagree with me?
(Image courtesy of 9comeback at FreeDigitalPhotos.net)