Uganda: Linking Savings Groups to Funeral Insurance
In 2009 CARE’s Save Up program launched three pilot projects to provide non-financial linkages in the three Save Up countries: bank accounts in Malawi, mobile phone banking in Tanzania and funeral insurance in Uganda. This publication describes the process of linking VSLA members in Uganda with funeral insurance. CARE has found that funeral insurance can have benefits for a family above and beyond the payment of funeral expenses. If a VSLA member has funeral insurance, the dread of an unexpected disaster is significantly reduced and withit the inclination to avoid investing in business through fear that whatever money is on hand may suddenly be urgently needed. When people know that they have funeral insurance, they feel free to use their funds for productive purposes or to take out loans from their group to invest in a business.
Funeral insurance can also have positive effects on other areas of family wellbeing. In fact, CARE even sees a link between funeral insurance and a decrease in sudden deaths. During the 3½ years of the insurance pilot, out of nearly 500 insurance policies purchased, only four claims were filed. If a family has a funeral insurance policy, therefore, they may be more willing to spend money on maintaining their health, on educating their children, on buying better food, on farm inputs or on making home repairs. People who have insurance are able to meet expenses that they would not have met if they didn’t know that there was support for them in case they need it. These are the indirect benefits that enable people to refocus the little funds they have after paying the premium. Having an insurance policy enables them to identify different priorities and expenses.