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Increasing Cremations Create an Exciting Opportunity for Final Expense Agents

What’s your sign?  Most baby boomers remember this cliché conversation starter of the 70’s.  Today I have found an even more effective and nearly universal opener that works with boomers who are total strangers as well as close friends.  I just ask them about their parents.  Certainly there are exceptions but it’s surprising how many people have “parent stories”.  From presiding over slow but steady declines, to arguing over driving rights, to providing needed companionship after the death of a spouse, it’s interesting not only how many people have experienced these things but also how happy they are to talk about them.  It seems almost cathartic to share the fears, frustrations and obligations that accompany the challenge of caring for aging parents. 

There is also a significant learning curve.  Those who have weathered these storms ultimately master the complexities of government services and health care resources and are happy to share their wisdom with others.  Some of the lucky ones are able to have long conversations with their parents to uncover those forgotten stories from their past and have frank discussions about how they want their lives to be remembered and honored.  In addition, most people develop very specific opinions about how they want to be treated when their time comes, and often it’s very different from what their parents experienced.  As a result of playing such an intimate role in their parents’ end of life care, baby boomers are forced to confront their own mortality sooner and more vividly than any generation prior. 

This is good news for the life insurance industry where agents historically have succeeded by “disturbing” prospects to accept that it isn’t “if” they die but “when”.  For many people, there is a limited window between their willingness to accept their own mortality and their ability to obtain life insurance at a reasonable cost.  Fortunately, for boomers that window is widening although the window now opens up to a very different conversation.  Rather than disturbing prospects, smart agents are now in the position to inspire people.  Meaningful discussions about death can focus more on life.  How do you want to be remembered?  What do you want to make sure people know about you?  How do you want your life to be celebrated?  What is your legacy?  And most importantly, what is the best way to help the people left behind to overcome their grief? 

Why is this important? 

One could argue that it’s absolutely critical to the survival of both final expense and preneed.   Offsetting the increasing intimacy that baby boomers now have with confronting end of life issues is a corresponding trend away from traditional funerals.  In 2011, 42% of funerals were cremations.  This is double the number from just 15 years prior.  In many western states cremations comprise a significant majority of funerals: 72% in Washington and 74% in Nevada.  More importantly, where traditional funerals cost an average of around $7,700, a basic cremation can be executed for less than $1,000.  As the cost of death declines so does the need for life insurance to deal with those costs. 

This has huge implications far beyond the life insurance industry.  Funeral homes, cemeteries, mortuaries, casket companies, hearse manufacturers, monument companies, and a host of other industries make up the $17 billion dollar a year death care industry.  The stakes are enormous. 

Fortunately, the driving motivation for most people isn’t to dispose of their loved ones in the most cost effective method possible.  We want to honor our loved ones and restore the dignity that death can often deprive.  We want to come together with friends and families to share our memories as well as our grief.  And for the departed, there is a desire to feel that their lives mattered and they’re leaving something more significant behind than just statistical data. 

And we need help figuring out how to do this. 

Enter the Funeral and Memorial Information Council.  FAMIC is a membership organization that comprises nearly all organizations in the death care industry – including the LIC – for the purpose of making information about death care and memorialization available to the public.  Paramount to FAMIC’s purpose is a grass roots public relations campaign called “Have the Talk of a Lifetime”.  In addition to helping people discover the unique life stories of the people who matter most to them, this campaign also helps families and friends make important decisions about how they wish to remember and honor the lives of their loved ones. 

Given the tremendous amount at stake, it’s no surprise that a number of other death care industry providers have implemented their own initiatives to assist consumers with their end of life decisions.  For example, Everest Funeral not only provides people with resources to plan and execute their funerals, but they also offer a funeral concierge service that places planning experts on call 24 hours a day.  In addition to providing expert advice and guidance to assist in planning funerals, Everest’s folks also have prices for every funeral home in the country right at their finger tips.  Many large corporations have started subscribing to Everest as a valuable benefit for their employees. 

Another innovative service is offered by Aurora Casket Company called beremembered.com.  This site doesn’t make any reference to Aurora or their products but merely offers a resource for consumers to record memories and lessons of their lives to share with families and later generations.  The site is very comprehensive while still being simple to use.  It has three primary sections: an “Idea Center” to provide inspiration and explanations to help people get started; a “My Story” section for bios, pictures, words of wisdom, and even the ability to send private messages to be delivered upon death; and “My Last Goodbye” section where the details regarding end of life plans can be stored. 

In addition, I published an article in 2010 that discussed the importance of Celebrant Services by referencing a funeral home network called Life Story that charges the least amount possible for caskets, embalming, and viewing but instead generates most of their revenue by preparing professional quality videos and detailed obituaries that chronicle and capture the life of the deceased.  In this way, the family is gaining something tangible that can be shared with future generations rather than things that are buried or entombed away. 

Even Service Corporation International (SCI), North America’s largest provider of funeral and cemetery services, has invested in a number of interesting subsidiaries that speak volumes about the direction of the funeral industry.  For example, Making Everlasting Memories is a company that provides resources for people to better memorialize and share the most significant events of their lives, similar to Beremembered.com.  Dignity Planning provides a secure on-line resource for people to preplan their funeral.  And as further evidence that cremations aren’t going away, they also have a subsidiary called the National Cremation Society.  

Herein lays the opportunity for the life insurance industry:  cremation may offer a less expensive way to dispose of mortal remains, but it frees up money to be used for things people care about even more.  Instead of the dreaded talk about life insurance as a responsible way to handle one’s obligations, the conversation can focus on celebration, memorialization, legacy planning, and grief management.  And instead of mailing millions of solicitations touting the limitations of social security and the benefits of simplified underwriting, agents can leverage the tremendous marketing campaigns the death care industry has already initiated and engage boomers in a conversation they actually want to talk about. 

Still not convinced?  Consider the wedding industry.  Eloping is by far the least expensive option yet the average wedding in the US still costs $25,200.  It’s no accident that wedding planners are fast becoming the biggest competitors of funeral directors – people pay the minimal amount for a cremation and the maximum amount for a celebration.  And just as people spend more time planning their vacations than their retirements, they are also more inclined to focus more on celebrations than obligations. 

The typical final expense sales tract is fast becoming as outdated as the “what’s your sign” pick up line.  Increasing cremations are transforming the very final expenses our products are intended to cover.  Life insurers need to change their focus as well or risk dancing alone in our leisure suits on the disco floor, still stuck in the 70’s. 

How are your parents?