Funeral insurance takes root in Uganda

By Faridah Kulabako

COMPETITION in the funeral insurance business is heating up. Funeral management companies have jumped into the fray in the area hitherto dominated by traditional insurance companies, as death becomes lucrative.

A-Plus Management, a funeral management company, has been the fi rst to launch with its product, A-Plus Care.

A number of others, including Uganda Funeral Services and Kampala Funeral Directors, are in advanced stages of venturing into the business. A number of others also said they would eventually get there.

There are over six funeral management service providers, among them Curious Funeral Services, Kampala Funeral Directors, Star Funeral Services and Reliable Funeral Services.

Funeral insurance requires policy holders to pay annual premiums that guarantee compensation in form of footing funeral expenses. The premiums depend on the policy plan and age of the insured person.

It should be noted that the risk exposure is higher among older people and those suffering from chronic diseases.

Services offered

Depending on the package, funeral benefits range from sh1m to sh10m upon death and it covers, among others, caskets, embalmment (treatment of the body), and provision of vigil space, transporting the body to ancestral home, grave-digging and construction and catering services.

Unlike life polices offered by the traditional insurance companies that have age limit and chronic diseases clauses, proprietors of A-Plus Care, said the package covers everybody irrespective of the age and health condition.

And unlike insurance companies that require relatives of the deceased policy-holder to fill lengthy paper work, including getting death certificates and letters from Local Councils before they can be compensated, under A-Plus Care, one is compensated as soon as management is informed to facilitate burial arrangements, according to Michael Zaake, who leads A-Plus Business Development.

Olivia Kisubika, the A-Plus Funeral management technical advisor, said though still a relatively new product on the market, funeral insurance is slowly catching on among Ugandans.

“Bereaved people go through a lot of difficulty to mobilise funds in a short time to finance burial arrangement of their relatives but pre-paid funeral arrangements offer peace of mind and allow the bereaved family to mourn their loss,” she said.

Kisubika explained that there was resistance at the start, but the population has started appreciating the benefits.

Uganda Insurer’s Association chief executive officer, Miriam Magala, said people are increasingly going for funeral insurance because of its convenience at death.

“Some people originally thought planning for your funeral would cause you to die sooner, which is not true; it actually saves the family embarrassment and worrying about money in the time of grief,” she said.

Insurance Regulatory Authority communications officer, Mariam Nalunkuuma, said funeral insurance will boost insurance penetration and innovation in the sector. 

General insurance uptake in Uganda is still low, estimated at about 0.8% of GDP, compared to Kenya’s 3%, Rwanda’s 25% and Tanzania’s 1%.

Magala, however, noted that although it is key to have a last expense funeral insurance cover, it may not necessarily drive the level of penetration. Rather, she says, more specific life insurance and savings products will be required to enhance penetration.