South African Funerals and Debt
Studies have shown that 85% of individuals’ debt troubles begin with the death of a family member. For many, losing a breadwinner means taking on their responsibilities, which could involve providing for one’s own family, as well as bereft dependents, such as elderly parents or the family of a deceased relative.
Contemporary African culture places a great deal of value on the extravagance and turnout of a funeral, as all are encouraged to attend and show their support for the sake of community cohesion. Moreover, the grandiosity of the ceremony is considered to be symbolic of how much the deceased’s family cared about their lost loved one.
Grand Expectations, Great Expenses
Family members are obliged to skimp and save for the sumptuous sendoff, or to sacrifice a portion of the little they earn on funeral insurance every month. No expense must be spared for the elaborate burial, as modest tributes are severely frowned upon. For example, the costs of a senior relative’s funeral, who held a high position within the family, can end up costing as much as R60,000.
Mourning family members are expected to produce a premium coffin, a cow for slaughtering, and an ‘after-tears’ party, complete with a lavish spread to sufficiently feed the masses of attendees. Consequently, the expenses soar to a point where funeral insurance, whether it be formal or informal, barely covers a quarter of what is inevitably spent on the service.
Bereaved and Over-Indebted
Funeral expenses often amount to that of a year’s income for many households. Thus, high-interest loans are taken out, plunging the family into unrelenting poverty – as their wages are nearly swallowed whole monthly by insatiable debts. After a household is burdened by the death and funeral of a relative, they often cannot afford to send their children to school, while adults often suffer from anxiety and depression over constant money worries.
The financially illiterate are an easy target for unscrupulous insurers and lenders, who easily collect premiums or instalments via direct debit. A responsible insurer or lender will always ask what your funeral expenses will reasonably be, and insist that provisions be made for essential costs, such as food and schooling, before approving anyone for a loan or insurance.
Avoid the After-Death Debt Trap
- Opt for an extended family funeral policy as a cost-effective alternative for low to middle-income earners.
- Avoid taking out loans to cover funeral expenses. Your lost relative wouldn’t want their family to suffer with debt.
- Be realistic about your budget and your responsibilities. The death of a loved one may mean more mouths to feed.
- The best way to honour a deceased breadwinner is by cutting back on funeral costs and taking care of their family instead.
- Opt for funeral insurance products that provide a grocery benefit and/or an education benefit.