Covid-19: Lower funeral costs will be the new normal

Losing a loved one is one of the hardest experiences a person will go through in their lifetime.

The importance of being able to bid them farewell is why so many South Africans go to great lengths and expense to give loved ones the send-offs they deserve.

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Stats SA revealed in 2018 that the average funeral cost was between R50 000 to R250 000 and was increasing year on year by approximately 12 per cent.

Because of this, many people take out funeral cover to ensure that there is enough money available to cater to the large numbers of friends and family who join in the send-offs.

But the Covid-19 pandemic has changed all of that, with government regulations limiting the number of people able to attend a funeral and travel out of their province.

The Department of Cooperative Governance and Traditional Affairs has ordered that only 50 people may attend a funeral, which can only go on for as long as the permit allows, and night vigils are prohibited entirely.

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• Covering financial vulnerability:

While many South Africans are ensuring that they are able to put together funerals for their deceased loved ones, they may be forgetting to cover other potential financial impacts.

Without taking away from the importance of burying a loved one with dignity while abiding to the necessary cultural protocols, the temporary funeral regulations provide an opportunity to review the way funerals have always been held and the costs attached to them.

“We believe the current Covid-19 regulations on funerals are a tough pill to swallow, but at the very least they may provide grieving families with slightly more financial flexibility as they come to terms with their recent tragedy.

“In this unprecedented time of uncertainty and anxiety, redirecting excess funds so that your family’s financial needs are taken care of, can hopefully provide a little comfort,” said Lindi Monyae, executive for Liberty emerging consumer market.

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• The potential savings:

While some  costs of a funeral are unlikely to change, including funeral parlour fees, the cost of the coffin and burial – the sheer drop in the number of people currently able to attend means that other major costs, such as hiring marquees and chairs or catering for food, will drop significantly.

This leads to a difficult conversation.

There is no longer an option to host large funerals so what happens with the large pay-outs from the funeral policy?

There is a need to adapt and adjust to the new ways.

“We believe that keeping funeral policies in place during these times is still important.

“What one could do with the excess funds can be discussed with a financial adviser.

“Alternatively, the funds can be used in honour of our loved ones’ memories by using them to protect your surviving family members,” said Monyae.

• Redirecting funds:

The cost difference between a funeral for 50 people versus 150 people is stark.

Saving tens of thousands of Rands by hosting the comparably smaller service, these excess funds can help manage any shortcomings a family may face when a loved one isn’t around anymore.

Savings accounts, short term investments or paying off other debt could be helpful.

• Family support funding:

The money can be saved to cover costs of continuing education or additional financial needs for those beneficiaries left behind.

Opening a bank account for a child can help teach them about the value of money whilst you invest in their financial future.

The younger children are when they start learning about money the better.

Make the lessons as practical as possible by getting them actively involved in the world of money.

• Re-invest:

Re-invest the savings.

“I would encourage finding suitable savings vehicles for the future.

“If you feel overwhelmed by your financial situation, it is always a good idea to ask for help.

“This doesn’t mean creating more debt, you need to get the right level of advice from a professional financial adviser,” said Monyae.

“Also speak to your bank and find out if they offer financial advice services.

“Many financial service providers offer the first consultation at no charge.”

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