By Tose Gava
In one of my previous pieces; Burial Societies – The Collapse Risks, I expressed my serious misgivings on family protection planning or lack of it based on burial societies. In this article I want to highlight the structural shortcomings of traditional funeral cover (goods & services) compared to US$ cash-based options that guarantee families totally flexible and worldwide cover.
The premise of my conviction is that we now live in a global village and your cover should be equally versatile and responsive to changing needs and circumstances.
Whether one ends up being repatriated, buried abroad, cremated or missing presumed dead there would be end of life expenses. The best way to deal with any such expenses is to have cash, better still US$s. The US$ is the green basket of currencies and guarantees better long-term value against currency volatility and inflationary erosion of value.
Insurance is about having the correct, adequate and suitable cover. It is not just for now but for the long-term should the protection need persists. If one was to create possible outcomes for the medium- to long-term and they realise that the chosen protection option leaves some serious protection gaps then one should be worried about its suitability.
Talking of final expenses planning, people need to liberate themselves from traditional options where they tie themselves to funeral directors’ goods and services cover. The fact that one has to die where the cover provider can physically reach them underpins the rigidity of cover option and the ultimate loser is the consumer.
Accepted, the funeral director may be providing best goods and services now, but what guarantee is there that they will still be the best when your time comes or worse still you may not need same benefits.
Imagine a parent who wants to buy their newly born child the best car when they reach 21, do they buy it now and hope that it will still be the best in the future. Surely, it is better to save the money and shop around for the best car at the time of need.
The point being that it’s better to buy into a US$ cash funeral policy and then choose the befitting goods and services at death, whenever that happens. In any case, your geographical location, preferences and choices may change over time.
Another case in point are yesteryear goods and services policyholders who migrated to countries where the likes of Doves are non-existent as a service provider? Had Doves covered them with US$ denominated policies, the clients would still be enjoying decent cover to this day regardless of where in the world they now live. In the event of a claim, the Doves would simply wire the money to wherever death would have occurred.
A worrying scenario is where people living in faraway diaspora countries are falling for goods and services based funeral covers provided by their home country funeral directors. The structural rigidity that comes with such covers means that in the long-term most people will end up with no cover as their choices and emotional belonging may change.
Traditional funeral insurance which is based on goods and services is structured on the assumption that one lives locally, dies locally and gets buried locally. That assumption fails to appreciate the fact that we now live in a global village where those covered can die anywhere in the world.
Some providers have innovated to offer goods and services in some countries outside Zimbabwe and as far afield as UK but that does not fully address the structural shortcomings. Life is fluid and there are too many different future outcomes that even with all the best will in the world a traditional goods and services cover will not be able to address.
Many Diasporans have naturalised to become Aussies, British, Americans, Canadians you name it. With such citizenship it becomes so easy to relocate or travel the world. One then needs a versatile cover, a worldwide protection without borders.
Wrong insurance and/or under insurance coverage can have dire consequences. Not to mention innumerable bereaving and begging bowl cases we are witnessing in the diaspora these days, how many times do people travel faraway on holiday only meet the fate there.
Recently a UK based Zimbabwean lady went to Ghana and was unfortunate to die there. Family and friends were frantically appealing for help to repatriate the body from Accra. Too many times I have come across appeals where diasporans invite parents abroad who, unfortunately, pass on whilst abroad.
Sometimes people get caught up in these sad appeals simply because they opted for wrong cover or they had no cover at all. They might also have fallen for a cover which was cheap but grossly unsuitable.
Having incorrect insurance cover may at times be as bad as having no insurance at all, only a bit worse in that it gives a false sense of security. In considering long-term protection needs like funeral insurance the choice should not just be naively informed by your current circumstances but likely outcomes or needs in the future.
It’s a fact that, over ten years ago it was rare to hear of diaspora death but now it’s a daily occurrence. Hardly a week passes before you get an appeal message from or sent on behalf of desperate bereaved families. Seasons are changing and the time for reality check is now.
Anyone wishing to cover for their end of life expenses might find it helpful to seriously consider the following scenarios in view of the suitability of their chosen plan:
Relocating Out Of Territory: take an example of a Diasporan living UK now who wrongly chooses to be covered on a goods and services cover and are guaranteed that should they die in UK the funeral directors will take their body to Zimbabwe. Fast forward time, if they were to relocate say to Canada, for example, where the funeral director is non-existent what happens to the cover? Is this a case of history repeating itself?
Most adult Zimbabweans diasporans had funeral covers back home and they relocated abroad where the funeral directors who covered them are non-existent. With a US$ cash cover it matters not where you are or what you chose to do.
Going on Holiday Out Of Territory: a British couple, from Birmingham, went on holiday to Cuba in June 2016. As fate would have it, the wife got ill and was hospitalised for £30k but still did not make it. They had to resort to GoFundMe appealing for £7k to try and repatriate the body back to UK. Their travel insurance refused to pay anything arguing pre-existing medical conditions. This can happen to anyone and the family could well have had a funeral directors’ goods and services cover but by dying faraway it meant the cover was not suitable.
Globetrotting Diaspora Pensionaries: with first world citizenships, the likelihood of retired parents or grandparents criss-crossing the world visiting family or holidaying is going to increase as the current first generation Diasporans get to retire in the future. Do not retire on a plan that does not give you worldwide cover.
Decide Against Repatriation: fast forward time thirty, forty or even fifty years from now, the realty may be that the whole obsession about being repatriated will be gone. By the time most first generation migrants retire it is likely that their emotional belonging would have shifted mainly because their loved ones back home may be long gone.
This reminds me of the Zimbabwean lady, a Diaspora Funeral Cash Plan client, who was laid to rest in London because her children are in London and so are the grandchildren. It meant that repatriating the body to Zimbabwe stopped making sense. This, again, shows how important it is to purchase a US$ cash as it gives total flexibility whatever the send-off choice.
Diaspora Children & Repatriation: sadly, I have seen a good number of diaspora families naively opting for funeral directors’ good and services policies especially the ones offering repatriation as an add-on. They even add their diaspora children on the policies. On the balance of probability children will outlive their parents and these children emotionally prescribe to the diaspora countries.
Adding such children to a funeral directors’ goods and services policy on the assumption that they would in the long-term be repatriated to back to Zimbabwe is at best a waste of money if not a scam on the part of the service provider.
Do not waste money on covers that may never work for you or your loved ones. It’s as naïve as assuming that the one have adequately provided for their children’s long-term final expenses needs by joining a Burial Society. If you are to provide for your children’s long-term needs do so in a cover that works as inheritance and intergenerational wealth for your children.
Opting For Cremation Abroad: perceptions are dynamic. It is possible that, with the passage of time, more people will opt for cremation. A US$ cash cover will provide the money needed.
Missing Person Presumed Dead: this may happen to anyone and it could be a case of flight accident. Such mishaps entails a ceremonial send-off not a funeral directors’ offering goods and services. A US$ cash policy gives that family cash to cover things like family travel and conducting the ceremonial send-off.
Money For Other Related Costs: diaspora funerals can be very expensive no wonder we sometimes see GoFundMe appeals topping US$20,000.00. Diaspora death, especially if it involves body repatriation, tends to be costly because suddenly the bereaved family has to have cash resources to cover costs of two prolonged funeral vigils back home and in diaspora, funeral church services, diaspora family travel, body repatriation, body clearance at the port of entry, flowers, food, transport and the burial itself. To add to that list will be the cost of shipping the personal effects of the deceased and the ensuing probate process.
I am reminded of a Zimbabwe family in UK who were covered on a funeral directors’ goods and services cover. Unfortunately, they lost one of their children. The funeral directors said they could repatriate the body to Zimbabwe and do the burial and that is when they confronted the shortcoming of their cover. There was no money for all other related costs especially money for family travel. With a US$ cash policy families can cover all the other related costs.
Finally, whilst I unreservedly recommend a US$ or hard currency cash cover over funeral directors’ goods and services I want to remind the readers that as you choose your provider make sure they have the capacity to guarantee a US$ denominated cover for life.
Make sure you are not covering your funeral expenses on a policy that expires as you may outlive it and die without cover. Make sure your cover has got no geographical restrictions to say it’s only valid in certain countries because you may travel only to die out of territory.
Make sure your cover does not require you to pay premiums forever because in the afternoons of your life in retirement you may fail to pay only to die without cover. Make sure you are not doing long-term planning anchored on reciprocity like in burial societies especially if you are economically empowered because mutual assistance is not guaranteed. Above all make sure you are not a victim of common excuses who ends up on GoFundMe.
Be covered and cover your loved ones. Protect yourself, protect your family, protect your dignity.
Tose Gava is a UK based financial adviser and writes in his personal capacity. He is contactable on email@example.com