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Funeral expenses insurance potential exists in Samoa

Affordability and trust in the organisation providing the insurance are the two main priorities highlighted by Samoans as being important to them when deciding to purchase funeral expenses insurance.

These were the findings of two focus group sessions organised by the Regional Disaster Resilience in the Pacific Small Island Developing States (RESPAC) and the Pacific Financial Inclusion Programme (PFIP) in Samoa last week where the idea of funeral expenses insurance was investigated.

The separate focus groups of employees and employers looked at the concept of funeral expenses insurance. The responses helped organisers to better understand the need for this type of coverage, what it should cover, how it should be priced and the best way of marketing and distributing the product.

Participants agreed that funeral expenses insurance would be an attractive insurance product that they would be willing to take up as it would help them deal with the high cost of funeral expenses.

Funeral Expenses Insurance pays out a fixed sum of money on the passing of an insured person. The money is paid out to a named beneficiary, for example the spouse of the deceased, and the money can be used for any purpose. Typically, the insurance is available to any adult, irrespective of their employment status, gender or location in the country. The cost of the insurance depends on the amount of insurance that is purchased.

Amit Garg, the Samoa-based PFIP Financial Inclusion Specialist explained, “We know that dealing with the high costs of funerals can be an added burden on families at these stressful and emotional times and that many people take out loans either from formal licensed institutions or from informal lenders, often at high rates of interest to deal with funeral expenses.

“We think that it is important that this specialised insurance should be looked at to see if it can help to ease these added financial burdens, and provide some peace of mind at these times.”

PFIP Regional Inclusive Insurance Specialist, Michael Carr added, “funeral expenses insurance is available in some Pacific countries already and if insurance providers in Samoa can find a way to make this available on a commercially sustainable basis then it can have clear potential to boost insurance penetration rates. Comments from the focus groups shows that designing an insurance product that gives clear customer value, that is easy to understand, that is affordable and that is available from a reputable institution would be bought, especially if paying for the insurance could be done by a range of family members in country, or those working overseas.”

He added that there were a lot of factors to get right if a new insurance product is to be successful, including its fit within the cultural context, appropriate sales channels, efficient administration, fair and prompt claims payouts and reaching sufficient scale.  

Insurance providers have an opportunity to see if this type of insurance can be made a reality in Samoa.

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