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Taurai Craig Museka
I encountered a book by George Samuel Clason titled The Richest Man in Babylon and it blew me away. The book is based on a city that existed 8000 years ago but it carries current lessons on wealth accumulation.

My mind was captured by two particular lessons; guarding your treasures from loss and insuring a future income. As I was reading those “golden rules” of accumulating wealth, I started reflecting on a presentation by the general manager of Old Mutual Life, Mr Reuben Java, who mentioned that only 30 percent of Zimbabweans are insured. He went further to say 77 percent of that 30 percent are on funeral cover only.

This means that funeral assurance is the most recognisable type of insurance in Zimbabwe. But does funeral assurance guard your treasure from loss? Does it insure a future income? Maybe before I answer that, let’s look at what funeral assurance covers.

Funeral assurance is a way to prepare for a funeral. This is a great way to prepare for all your and your dependents funeral costs should you pass on.

Funeral assurance plays to emotional needs. Most people desire a decent burial for themselves and also for their family members. It is imperative that people sit down and think about what a decent burial is for them. Is it a burial where the wishes of the deceased have been honoured? What are the aspects of a funeral are absolutely important? We can look at it from another angle and ask what a bad burial is? I would like to think it’s a burial where those that remain realise that they have spent too much on things they did not need because they were emotional and in grief.

It’s natural to want to do more for a person who has passed on as a sign of respect but is it necessary? Should we also look at another angle? What is a shameful burial? Someone could tell me it’s a burial were the family do not have enough to money to bury their loved one. But for me that’s not it. When you slip into debts to bury a loved one, that’s shameful. When you don’t provide emotional support for those grieving, that’s shameful funeral, when the deceased person has not left anything for the people that remain behind that’s a shameful.

Funeral assurance can help you prepare for a decent burial whilst you are still there. You get to choose the type of casket you require, you choose whether you would require transport for mourners, a hearse, video recording etc. However, as much as funeral assurance is important for provision of a decent burial it simply does not completely remove the possibility of a shameful burial. What benefit do you get from having a decent burial whilst you haven’t left anything meaningful for those that remain? Funeral assurance does not transfer any wealth! If you are the breadwinner why would you stop at thinking about the funeral when you think about your death?

Why not also think about those that will remain behind? How will they cope beyond that funeral? Who is going to get them groceries or school fees? Are you sure you are more concerned with how you are going to be buried more than transferring your wealth to your dependents? Does it not make much more sense to live something for your loved ones? I think we should go beyond taking up funeral assurance and also consider life assurance.

I cringed when I came across this quote by the director of insurance at Consumer Federation of America, Mr Robert Hunter, who said: “Funeral insurance is a predatory type of insurance. Reality is people who buy it worldwide tend to be less educated and have low income and they get a poor deal. You find that there are a lot of life assurance deals with benefits greater than those of funeral assurance but at the same premium”.

Life assurance is more than just a death benefit. Life assurance can give you a lump sum in the event of your death. Life assurance if properly structured can reward you whilst you are still alive. There are life assurance companies that celebrate your life by giving you back part of your premiums in any specified period that you are alive. Life assurance also enables your family to continue to get monthly income for years after you are gone. This is regardless if you are formally or informally employed. This means that even after you pass on your family is able to pay for living expenses outstanding debts or even buy assets. If you live long enough you will be able to enjoy the premiums given back by spending it however you want. You could also discover that if you start paying for life assurance when you are younger the premiums are very low and they will stay low even as you grow older!

What’s interesting is some of these life assurance products have a funereal benefit embedded in them. As the cash value of your life assurance policy builds up they can also be ceded with your bank for other income producing activities. The bottom line here is before you disqualify yourself of life assurance and settle for just taking funeral assurance, take a step further and sit down with a financial advisor to research on smart wealth transfer strategies. Financial advice is free of charge with every good life assurance company!

Taurai Craig Museka, a freelance insurance writer. Send feedback to [email protected] / WhatsApp +263775608014