How much does a funeral really cost?

It is important to know the true cost of funerals in South Africa to prevent under-insurance, forcing you to fork out all your savings at a time when you should be mourning with your family and have no time to make other plans.

Funeral cover is the largest insurance segment in South Africa but despite the average South African owning up to four policies, most families are still under-insured and end up taking up expensive loans or credit card debts to cover a loved one’s funeral expenses, Clinton Macdonald, the CEO of KGA Life, says.

“South Africans underestimate what the average funeral really costs, because there are many potential costs they may not consider or be aware of when they take out their policies at banks, insurers, funeral parlours or burial societies.

“Financial distress arises when families are out of pocket and end up paying 20%-40% interest on emergency credit. In the current economic climate, it is time for consumers to get educated about what funerals truly cost today to enable them to make more informed financial decisions.”

Macdonald says the issue of under-insurance has been around for years but became especially pronounced during the pandemic when many families were caught off-guard by unforeseen tragedy. It was during this period that many issues in the funeral insurance industry surfaced.

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How much does the average funeral for 50 guests cost in SA?

According to an independent analysis while the average American funeral costs about R200 000, the average South African funeral, with catering for 50 guests included, costs between R70 000 and R84 000.

“It all depends on the level of quality and detail the family wants if the funeral is urban, rural or remote and the cultural customs that apply, which means that the costs of different funerals can vary greatly.”

Taking publicly available sample information, this is how the costs of five of South Africa’s top funeral providers compare:

Macdonald says funeral costs can also become inflated when long-distance repatriation and group travel are required, or when families want more luxury items than they were insured for.

“Families sometimes decide at the last minute to include a fleet of luxury cars for the funeral procession and this can add significant expenses that were not initially budgeted for.

“A large funeral in the Eastern Cape or Harare for someone who lived in Johannesburg or Cape Town can also add greatly to the costs, due to factors such as accommodation, transport and repatriation of the body.”

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Make sure what the funeral policy covers

He says policies often only cover basics such as the casket, burial and limited catering because the policyholders did not foresee additional expenses they would have to cover. This results in families having to cover unexpected costs with high-interest loans.”

Tinashe Matsika, operations executive of Zororo Phumulani, a funeral and repatriation service for Zimbabweans living in South Africa, concurs.

“Unofficially, there are about four million Zimbabweans living in South Africa and the custom is to be buried on family land back home.

“A repatriation from Johannesburg to Harare by road costs about R28 500, while air repatriation can come in at about R45 000, depending on the number of kilograms.

“A funeral for about 50 people could come in at US$2000, including food, flowers and transport.”

A standard funeral policy in turn could cost R89 per month and families can claim from the third month (adding up to R267), meaning it is a massive saving from having to pay for the repatriation and funeral in cash.

“Consumers must consider this benefit of insurance. They do not need to be paid up to the total amount it will cost, as they are covered as soon as the initial waiting period is over.”

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What to consider for funeral cost

Macdonald says consumers must carefully consider factors such as funeral location, number of guests, level of luxury, whether there is family abroad that needs to be flown or dialled in and other discretionary expenses, before taking out funeral policies through a funeral home, burial society, insurer or bank.

“Cost transparency and forward planning can save cash-strapped families a lot of financial pain and suffering when the unexpected happens.”