the age of 9 million subscribers
according to the Korea Fair Trade Commission's recent disclosure of key information on prepaid installment companies in 2024, the number of funeral subscribers has surpassed 8.63 million, and experts predict that it will soon surpass 10 million.
considering that the total number of households in South Korea is about 22 million, that's nearly half of all households. since there is usually one person per household, signing up for a sangjo is now becoming a necessity rather than an option.
so why are so many people signing up for funeral services?
what is an inheritance?
a funeral plan is a comprehensive funeral service that takes care of the funeral process from start to finish when a family member or friend dies. in the past, people had to come up with large amounts of money at the last minute for each funeral, but with funeral services, you can plan ahead.
typically, funeral services work on a monthly payment plan. you pay a certain amount each month, like a savings account, and when the time comes, you get the services you've contracted for.
in the pre-paid market, the average cost of a funeral service is around $5,000, and can be as high as $10,000. since you can't predict when a funeral will happen and it's a big expense all at once, spreading it out over the course of a month eases the financial burden.
why it makes financial sense to sign up for a funeral plan now
if you're thinking about buying a funeral plan, the sooner you decide, the better off you'll be financially. Why?
funeral costs rise by an average of 3-5 percent each year. this is due to a variety of factors, including inflation, increased labor costs, and higher prices for funeral supplies. However, with a funeral plan, the cost is fixed based on the price of the funeral at the time of purchase.
for example, if you sign up for a $5 million plan in 2025, you'll receive services at 2025 prices, even if the actual funeral occurs in 2035. if the cost of a funeral rises to $7 million 10 years later, you'll still receive the $5 million benefit.
as long as we're human, funerals are bound to happen, so it's smart to plan ahead while prices haven't risen as much as possible.
it's also flexible, as you can get a full refund when it matures, or transfer it to your family as needed.
4 things to look for when choosing a funeral company
once you've made the decision to buy an annuity, it's important to know which company to choose. be sure to check out these four criteria
first, the quality of the funeral service. it's not just a financial product that collects money, it's a funeral service for your loved ones. look closely at the network of funeral homes, the expertise of the service staff, and reviews from real people.
second, the company's credibility and stability. there have been recent cases of some funeral companies failing and leaving subscribers out of pocket. Be sure to check the company's financial status, how long it has been in business, and whether it is registered with the FTC.
third, make sure you know whether you're buying a funeral insurance policy or a traditional funeral product. The two operate differently, with different coverages, additional costs, and different reimbursement terms. use our funeral comparison to find the right product for you.
fourth, make sure you know exactly how much your monthly payment will cost - it's important to make sure it's something you can afford based on your financial situation. each company and product has a different monthly payment, but it's usually around $30 per month.
differences between funeral insurance and traditional funeral arrangements
many people confuse funeral insurance with traditional funeral services. while they look similar, they are essentially different.
funeral insurance is an insurance product sold by an insurance company and regulated by the Financial Conduct Authority. It pays out a benefit upon death, which you can use to pay for a funeral. it's a financial structure that involves paying premiums and receiving a payout.
a traditional funeral, on the other hand, is a pre-paid contract for services. it is regulated by the Fair Trade Commission and is governed by the Prepaid Installment Transaction Act.
refund terms, cancellation fees, and scope of services vary, so it's important to read the terms and conditions carefully before signing up and do your research.
affordable funeral services starting at $100/month
recently, there have been some funeral services that allow you to sign up for as little as 100 won per month. goi 100 Won Funeral is a typical example, where you pay 100 won per month and pay the remaining amount after the funeral.
the advantage of this product is that for 100 won per month, you are guaranteed the price at the time of subscription for life. you can protect against price increases without having to pay upfront.
it also reduces distribution margins, making the final payment about 50 percent of the price of a traditional prepaid funeral service, which makes it affordable. Customer satisfaction among actual users is high, with a 4.9 out of 5 rating.
if you're looking to minimize your financial burden while still enjoying the benefits of funeral services, this post-paid option is worth considering.
frequently asked questions
Q1. Do you really have over 9 million subscribers?
A. Yes, according to KFTC data in 2024, 8.63 million people signed up for sangjo, and experts believe it will soon surpass 10 million.
Q2. Are there any disadvantages of funeral services?
A. The main disadvantages of inheritance are that you may lose money if the company goes bankrupt, and the refund amount may be small in case of early termination. Therefore, you should carefully check the financial stability of the company and understand the refund conditions in the terms before signing up.
Q3. How do I get a bereavement refund?
A. You can receive your refund at the end of the contract or upon termination. however, the rate and conditions vary by product, so be sure to check the terms and conditions before signing up.
Q4. How much does a funeral cost?
A. The average cost of a funeral service is around KRW 5 million, with a maximum of KRW 10 million. monthly payments are usually around 30,000 won, but there are now products that start at 100 won per month.
Q5. What are the advantages of funeral services?
A. The main advantage of funeral services is that you can pay for your funeral in advance to reduce your financial burden. You can also lock in the price at the time of signing up to protect against inflation and receive professional funeral services.
closing thoughts
buying a funeral plan is now a smart pre-planning choice for 9 million people. with the cost of funerals rising every year, the sooner you sign up, the better off you'll be financially. however, when choosing a funeral company, you should carefully compare service quality, company stability, product types, and monthly payment costs.
find a funeral service that fits your financial situation and plan ahead. we'd love to hear about your choices. please share your experience in the comments and subscribe to our newsletter for more helpful information.
related articles: A breakdown of funeral insurance vs. funeral services, A complete guide to funeral reimbursement terms, and How to choose a reliable funeral company