We’ve written repeatedly on the shortage of human organs for transplantation, and the different incentives that are being offered to produce more donated organs. Among the incentives: a commemorative medal and a shorter prison term. Now a reader named Ronald Wielink writes to tell us that in the Netherlands, a funeral insurance company is offering to cut funeral costs by 150 euros if the deceased has donated an organ. (Here’s a brief link in English; here’s one in Dutch.)
As Wielink explains, this incentive came about from urging by the Kidney Foundation charity. The donors get either a discount on their funeral insurance or a discount on the burial cost itself. “There are also some M.P.’s,” he writes, “who propose that organ donors should get a discount on government fees, e.g. getting a passport.”
I had two initial reactions to hearing about this incentive:
1. Creating a connection between donating an organ and your own death wouldn’t seem to be the most appealing incentive.
2. Funeral insurance? What the heck is funeral insurance? Surely such folly doesn’t exist in the U.S., right? Wrong. As someone who tries to buy as little insurance as humanly possible, I cannot think of many forms of insurance that are less worthwhile. Can you?
(Hat tip to Dan Sage too; also, Marginal Revolution blogged about this a while back.)
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Like so many things that seem to make no economic sense, funeral insurance is basically a tax or benefits dodge. A prepaid funeral doesn’t count as an asset toward Medicaid eligibility, making it reasonable to hide some dollars there if you are looking to go on Medicaid. There are probably some other tax impacts as well (estate?), but that’s the big one.
Like so many things that seem to make no economic sense, funeral insurance is basically a tax or benefits dodge. A prepaid funeral doesn’t count as an asset toward Medicaid eligibility, making it reasonable to hide some dollars there if you are looking to go on Medicaid. There are probably some other tax impacts as well (estate?), but that’s the big one.
I really cannot imagine being concerned about anything other than a pine box when I am dead.
I really cannot imagine being concerned about anything other than a pine box when I am dead.
The first link that you have is in the UK. Funerals are getting expensive, and it’s basically a pre-paid funeral plan.
Speaking as someone who fell into the poverty trap when her father died, they’re a good idea and should be compulsory – maybe as part of a pension package.
To explain: Dad died when I was 20 and a student. I wasn’t eligible for a grant because I wasn’t receiving benefits. I wasn’t eligible for a loan because I wasn’t earning yet. Fortunately, friends clubbed together and paid for it. If there had been an estate to inherit from, I would still have struggled to get the money in time as the financial situation made life difficult to get credit.
My grandmother, on the other hand, had sorted hers out (as has my mother – who is still alive), and it meant that while they were waiting for probate the funeral could go ahead, and be paid for without undue stress. No family fighting about what the funeral ought to be like and we knew we were honouring her memory.
People don’t like to think about dying. They really don’t want to think about dying with particularly bad timing for their families.
Love
Miriam
The first link that you have is in the UK. Funerals are getting expensive, and it’s basically a pre-paid funeral plan.
Speaking as someone who fell into the poverty trap when her father died, they’re a good idea and should be compulsory – maybe as part of a pension package.
To explain: Dad died when I was 20 and a student. I wasn’t eligible for a grant because I wasn’t receiving benefits. I wasn’t eligible for a loan because I wasn’t earning yet. Fortunately, friends clubbed together and paid for it. If there had been an estate to inherit from, I would still have struggled to get the money in time as the financial situation made life difficult to get credit.
My grandmother, on the other hand, had sorted hers out (as has my mother – who is still alive), and it meant that while they were waiting for probate the funeral could go ahead, and be paid for without undue stress. No family fighting about what the funeral ought to be like and we knew we were honouring her memory.
People don’t like to think about dying. They really don’t want to think about dying with particularly bad timing for their families.
Love
Miriam
One of the early google links offers this tidbit:
“In Washington State, by regulation, insurance companies are not allowed to collect more in premiums than the face value of the funeral insurance policy.”
Everyone dies. The sum of the premiums cannot exceed the face value. Is there really profit to be made in the difference between the insurance policy face value and the actual cost of an insurance, or in the (presumably) tiny number of people who pay the insurance and never collect?
One of the early google links offers this tidbit:
“In Washington State, by regulation, insurance companies are not allowed to collect more in premiums than the face value of the funeral insurance policy.”
Everyone dies. The sum of the premiums cannot exceed the face value. Is there really profit to be made in the difference between the insurance policy face value and the actual cost of an insurance, or in the (presumably) tiny number of people who pay the insurance and never collect?