An Awareness Model for an Islamic Pre-Need Funeral Plan

Abstract

Objective -Failure to prearrange one's funeral may lead to financial hardship on one's family members. Despite the importance of a funeral plan, little is known regarding the awareness level among Muslims regarding the Islamic Preneed Funeral Plan (IPFP). Because of the dearth of academic research on the awareness among Muslims regarding IPFP, this paper aims to assess the awareness level of Muslims regarding IPFP and to develop an awareness model that frames factors affecting IPFP awareness level. Methodology/Technique -To achieve this, a questionnaire was used to collect the data and PLS-SEM was used to analyse the data. Results show that the level of awareness regarding IPFP is low and is similar to the result found in the USA Findings -The results further show that marketing communication efforts and social influence are significant factors affecting awareness of IPFP. These results have practical implications for IPFP providers and should help them better market their products and mitigate the potential for financial hardship funeral costs may have on families. Novelty -The scarcity of land for burial plots, soaring funeral costs and an increasingly aging population rate necessitates funeral prearrangements by subscribing to a pre-need funeral plan. This prearrangement is an advanced financial provision that covers funeral and burial expenses by enabling subscribers to make funeral arrangements while they are still alive.

Takaful funeral; an innovation for Islamic insurance product

“…Islamic insurance has played an important role in providing lives and property protection to its members when calamity occurs. However, one of the emergency services that is not yet available and is urgently needed by the community is death and burial land services (Katan et al, 2019). The insurance product closest to Islamic funeral services is death benefit (Ali et al, 2019;Mathijssen and Venhorst, 2019).…”

“…Innovative changes in managing the funeral business system, especially insurance membership, must be made to those in need of Islamic funeral services. In this case, the method used by Takaful Funeral Amsterdam, Islamic Funeral Funding Millî Görüs of Turkey and Arrahma of Morocco could be a reference for the Islamic financial institutions to develop new products in funeral funding (Fan and Zick, 2004;Katan et al, 2019;Raza et al, 2019;Cardoso et al, 2020).…”

“…However, even before Covid-19, people had to spend a lot of money burying the deceased. This condition should be a lesson for the government or other parties, such as insurance companies, to mitigate risks and assist in the funeral process (Corden and Hirst, 2013; Katan et al , 2019).…”

“…The difficulty of acquiring burial land and high funeral costs are more pronounced for Muslims (Katan et al , 2019). Islamic law requires jenazah to be buried soonest (Ahmed and Oran, 2020).…”