Pre-Need Life Plan — and the Costs of Deathcare Services in the Philippines

We’re all gonna die — but we don’t know when, so it sounds proactive to prepare for it by purchasing a pre-need life plan and free our loved ones from all the financial burden. 

But, is a pre-need life plan the best option so far? You’ll find it out.

You might have come across a short funny-but-true video on TikTok or Facebook about how Filipinos hold funeral services. It simply shows two young ladies, an American and a Filipina, having a conversation outside a room where party noise from the inside can be heard, and it goes this way: 

American: What was that?

Filipina: Every culture mourns differently. Us, Filipinos, celebrate life instead of focusing on death.

American: What was that? (curious about the lechon being sneaked into the room)

Filipina: Lechon! Symbolizes the joyfulness of a gathering.

American: Alright. Okay, let’s get in there.

Filipina: Shoot! Do you have any cash?

American: Oh, for the collection plate?

Filipina: No! No! For the poker tournament. Gambling helps us with our mourning.

American: Woah! Okay. Hold on. Listen. When I die, I want a Filipino funeral.

It may be funny, but it’s just how we hold funeral services the Filipino way, especially in rural areas or even in small city neighborhoods. But more interestingly, it may be harder to celebrate life and less focus on death if the bereaved family faces the financial burden or the high costs of the funeral and burial services. 

Quick Take — a pre-need life plan can give additional financial security for the family and loved ones, especially that funeral and burial services get costlier year after year, but it may just be behind life insurance when it comes to flexibility, reliability, and recommendability. Read more about pre-need life plans below.

Deathcare

What is deathcare? Deathcare involves a wide range of products and services for the care of the deceased, such as those related to embalming, cremation, funeral, burial, and memorial. 

Deathcare Industry in the Philippines

How big is the deathcare industry in the Philippines? According to Borres (2020) in Growth Drivers in Selected Death Care Businesses in the Philippines, the deathcare industry is stable, profitable, and still growing in the Philippines.

Moreover, the growth of the deathcare industry can be attributed to various external factors — an aging population, robust economy, increase in disposable income, population growth, and death rate increment — and internal ones — strategic vision, marketing strategy, and branding product and service, financial performance, human capital, and customer base. 

Although the earnings of the pre-need (life, education, and pension plan lines) industry dropped in 2022, there has been a significant increase in the number of life plans sold, according to the Insurance Commission. Premiums sold increased by 3% to P21.18 billion as demand for life plans increased.

St. Peter Life Plan Inc. sold the most life plans at 729,891 with a contract price of PHP35.69 billion. It recorded the most considerable net worth of PHP13.85 billion; however, it only earned PHP207.54 million as of the end-2022.

Costs (Rough Estimates) of Funeral and Burial Services in the Philippines

How much do funeral and burial services cost in the Philippines? While the costs indicated below are just rough estimates and inevitably increase year after year, these may be good starting points for funeral planning, especially if you’re considering getting a pre-need memorial life plan. Equally, it is essential to note that the longer the funeral is held, the more expensive it gets. 

• Death certificates, which may be the first on the long list of expenses, can be processed at the Local Civil Registry for a fee of PHP150 to PHP500.
• Wooden caskets may range from PHP3,000, but metal caskets cost way higher, from PHP17,000 to PHP80,000. Higher-end caskets cost at least PHP100,000.
• If not going traditional, cremations in the Philippines may cost between PHP70,000 to PHP100,000. Urns for ashes are also priced from PHP2,500 to PHP100,000, or even higher, depending on the material. 
• Clothing items for the deceased may cost between PHP1,000 to PHP3,000.
• Memorial chapels may charge rentals for PHP1,000 to PHP10,000 per night.
• Modest funeral ceremonies, at the cheapest, cost around PHP8,000 to PHP15,000. Mid-range services cost around PHP250,000, while high-end funeral services may even be as high as half a million pesos.
• Food and refreshments for wake visitors vary depending on the funeral days, but it’s safe to reserve PHP5,000 to PHP30,000 for these.
• Apartment tombs may cost up to PHP3,000. Memorial lots in cemeteries cost between PHP40,000 to PHP300,000. Garden lots and family mausoleums cost way higher and reach up to PHP10M.
• Other burial services, such as transportation and security, may need an additional budget of PHP50,000. Lawn excavation also comes costly at a range of PHP15,000 to PHP40,000. 

Pre-Need Life Plan

What is a pre-need life plan? Simply put, a pre-need life plan, sometimes called a memorial life plan and pre-need funeral contract, is a pre-paid life plan that includes the provision of funeral, burial, and memorial services for the deceased.

Pre-need plans, as defined by the Republic Act 9829, also called An Act Establishing the Pre-Need Code of the Philippines, are contracts, agreements, deeds, or plans for the benefit of the plan holders which provide for the performance of future services, payment of monetary considerations or delivery of other uses at the time of actual need or agreed maturity date, as specified therein, in exchange for cash or installment amounts with or without interest or insurance coverage and includes life, pension, education, interment, and other plans, instruments, contracts, or deeds as may in the future he determined by the Commission.

What are the specific inclusions of a pre-need life plan? To get an idea, let’s consider the St. Peter Life Plans which come with these covered memorial services based on their official website:

• client support 24 hours a day, seven days a week
• retrieval of the corpse from the place of death
• body preparation (embalming and cosmetics) by professional morticians
• metal or wood casket (as per plan type)
• viewing for 4 days (traditional plan) and 3 days (cremation plan) in air-conditioned chapels (availability) or 7 days in the family residence
• announcement board, guest register book, wreath, and ‘thank you’ cards
• St. Peter’s tribute on the last day of the wake
• funeral coach in the time of internment, and
• dispatch of appropriate transportation facility

To add, St. Peter’s traditional memorial and cremation life plans do not include yet memorial lots and columbaria. Additional fees for retrieval and interment services over a 25-kilometer road distance to and from the servicing St. Peter Chapel may also be charged.

Pre-Need Life Plan Contract Prices

How much does a pre-need life plan usually cost? Pre-need life plans vary on a few factors, including the traditional burial and cremation preferences, the casket, and urn types. 

St. Peter Life Plans (Traditional and Cremation). Per their official website, these are St. Peter (traditional and cremation) Life Plans which come with value-added insurance coverage, and are transferable, assignable, and available at monthly, quarterly, semi-annual, and annual installment payments (contract prices as of April 2023 and may change anytime):

• St. Anne (PHP157,500). Metal Casket, Double Top (Split and Full Lid Covers), Full Glass, Elegant Interiors, Corners, and Handles.
• St. Bernadette (PHP125,000). Metal Casket, Single Top (Full Lid Cover), Full Glass, Elegant Interiors, Corners, and Handles
• St. Claire (PHP98,500). Metal Casket, Single Top (Half Lid Cover), Half Glass, Elegant Interiors, Corners, and Handles
• St. Dominque (PHP67,500). Wood Casket, Single Top (Full Lid Cover), Full Glass, Elegant Interiors, Corners, and Handles
• St. Gregory (PHP57,000). Metal Casket, Single Top (Split Lid Cover), Full Glass, Elegant Interiors, Corners, and Handles
• St. George (PHP53,000). Wood Casket, Single Top (Split Lid Cover), Full Glass, Elegant Interiors, Corners, and Handles
• St. James (Cremation Before Viewing, PHP66,000). Full Cremation Service and Exquisite Marble Urn
• St. Jude (Cremation After Viewing, PHP99,000). Full Cremation Service, Exquisite Marble Urn, Provision of Metal Casket (Single Top and Half Lid Cover), Half Glass, Elegant Interiors, Corners, and Handles.

Golden Future Life Plans (Traditional and Cremation). To make a comparison, these are the Golden Future Life Plans which also come with monthly, quarterly, semi-annual, and annual installment payments and are assignable and transferable (contract prices as of April 2023 and may change anytime):

• New KAPILYA Plan (PHP100,000). 4-Day Chapel Viewing, Metal Casket, Retrieval, Embalming, Cosmetics, Lightings, and Hearse
• New TAHANAN Plan (PHP72,000). 7-Day Home Viewing Service, Metal Casket, Retrieval, Embalming, Cosmetics, Lightings, and Hearse
• New KAIBIGAN Plan (PHP72,000). 4-Day Partner Chapel or Home Viewing Service, Metal Casket, Retrieval, Embalming, Cosmetics, Lightings, and Hearse
• New DESTINY Plan (PHP170,000). 4-Day Chapel Viewing, Metal Casket, Retrieval, Embalming, Cosmetics, Lightings, and Hearse
• New LEGACY Plan (PHP300,000). 4-Day Partner Chapel Viewing, Metal Casket, Retrieval, Preservation of the Body, Lighting, and Hearse
• KAPILYA Cremation Plan (PHP95,000). 4-Day Chapel Viewing, Cremation with Marble Urn, 4-Hour Use of Crematory Family Lounge, Ceremonial Metal Casket, Retrieval, Embalming, Cosmetics, and Lighting. 
• TAHANAN Cremation Plan (PHP80,000). 7-Day Home Viewing Service, Cremation with Marble Urn, 4-Hour Use of Crematory Family Lounge, Ceremonial Metal Casket, Retrieval, Embalming, Cosmetics, Lightings, and Hearse.

Pre-Need Life Plan Versus Life Insurance

What is the difference between a pre-need life plan and life insurance? Generally, the difference is a matter of being prepared for something expected and something unexpected. Pre-need life plans and life insurance policies differ in these ways:

• Pre-need life plans, just like pre-need education and retirement plans, which are also for the expected, are purchased by accepting that death is EXPECTED and, thus, preparing for it and all the costs that the family and loved ones will face.
• On the other hand, life insurance policies, availed mainly by breadwinners, provide financial protection for the family and loved ones should UNEXPECTED events such as critical illness, disability, accident, and sudden death happen, which may result in a loss of income source and financial disasters. 
• Both may be intended for end-of-life expenses, but a pre-need memorial life plan pays out to a funeral service provider and can only be used for funeral services. In contrast, life insurance policies can pay out to your loved ones as they can use the death benefits more flexibly.

Pre-Need Life Plan Providers (Pre-Need Companies) in the Philippines

Pre-need companies are now under the regulatory supervision of the Philippine Insurance Commission. There are three main pre-need product and service lines — life, education, and pension — and the companies listed below are issued certificates of authority for licensing to sell pre-need life plans (as of March 2023):

[1] Cosmopolitan Climbs Life Plan, Inc (CLIMBS).It started as an experiment in mutual protection for coop members in 1971. Soon, it reinvented itself to appropriately respond and cater to the needs of its cooperative partners and embarked on assurance partnerships with primary cooperatives. It is now a Mindanao-based group of coop-business with CLIMBS Life and General Insurance Cooperative as its flagship subsidiaries.

[2] Diamond Memorial Care Plans, Inc. (DMCPI). It is one of the biggest and most trusted memorial care plan brands in Southern Philippines, with established operations covering the region of Mindanao, serving more than 80,000 plan holders and counting.

[3] Eternal Plans, Inc (Eternal Plans). It operates as a member of ALC Group and, as a pre-need company founded in 1981, initially offered the life plan to complement the memorial lot business of a sister company, Eternal Gardens Memorial Park Corporation. It has since expanded to become a significant player in the pre-need industry, offering life, pension (since 1987), and education plans (since 1988). It is one of the few pre-need companies licensed to provide the three major products of the pre-need industry.

[4] Evergreen Life Plan Services, Inc (Evergreen Chapels and Crematory). Its Pasig-based chapels and crematory services facilitate meaningful ways for families to grieve their loss, celebrate the memories, and honor the life lived by their loved ones.

[5] Golden Future Life Plans, Inc (Golden Future).It offers premium life plans in the Philippines. As part of the Villar Group of Companies, it has partnered up with numerous mortuaries across the country, each guaranteed to deliver the level of service fit for their clients. Golden Haven Memorial Chapels and Crematorium, its partner, is widely known for its top-tier chapels, quality death care services, and top-of-the-line crematorium facility that is first and only in Las Pinas.

[6] PhilPlans First, Inc (PhilPlans). With over 500,000 customers, spanning its 25 years of track record, growth, and stability, it makes products that range across pension, education, memorial, and savings. It is also among the companies under STI Investments, Inc., which include PhilhealthCare, Inc. and Philippine Life Financial Assurance Corporation.

[7] St. Peter Life Plan, Inc (St. Peter). It is a pre-need deathcare Company that offers affordable traditional memorial life plans to all segments of society. Since 1970, it has maintained its leadership and excelled as a deathcare expert in the service industry through the continuous development of its wide range of memorial products and services attuned to the changing needs of Philippine society.

[8] Trusteeship Plans, Inc (TPI). It was founded in 1968 and is one of the innovators and pioneers in the pre-need industry in the Philippines that offers memorial life plans. In 1989, it also started offering educational plans.

Key Takeaways

Purchasing a pre-need life plan comes with both advantages and disadvantages just like any other financial product or service, and these are some key takeaways:

• A pre-need memorial life plan may offer you peace of mind as you know that you make advanced arrangements and payments for the cost of funeral services and that your family and loved ones will no longer worry about them. 
• Its value appreciates over time. You buy early, and your family will save more significantly on funeral services later. Since it is normally assignable and transferable, multiple life plans may be considered an investment, i.e., you buy plans and sell them later on or transfer the claims to your family members in case of need.
• Life insurance and pre-need memorial life plans can mutually work together to serve your financial needs for savings, protection, and wealth conservation. 
• However, the most significant disadvantage of a pre-need life plan is that it is less flexible than other insurance products, such as life insurance which directly assigns family members as beneficiaries and, thus, may use the insurance money for other equally important purposes.
• Funeral service providers, affiliated chapels, and other partners may not be available in some places, rural areas, for example, and this may result in added costs and problems if death happens there. Also, all services and plan inclusions may not always be guaranteed in times of need which may cause disappointments.
• Memorial life plans are ‘pre-need plans,’ which have made a bad impression and reputation to many people because of the many failed educational plans. Also, many pre-need life plan providers seem newcomers to the industry. 
• The pre-need industry in the Philippines observes a different set of rules and standards compared to the life insurance industry, and in most cases, is invested in high-yield but high-risk investments.

In summary, a pre-need life plan can be an added financial security for the family and loved ones, especially that funeral and burial services get costlier year after year, but it may be behind life insurance when it comes to flexibility, reliability, and recommendability.

Disclaimer: All tips, top picks, and recommendations in this article, however well-researched, informative, and practical, do not necessarily constitute professional or expert advice. You are thus encouraged to do further research and confirmations, make informed financial decisions on your own, and even seek guidance from your financial advisor if you have.

Read also:

How to Choose the Right Life Insurance for You [Guide for Filipinos]. This article provides comprehensive information about life insurance and what makes it extremely important, as well as a helpful guide on choosing the right life insurance policy based on needs and preferences. 

Global Recession 2023 — and Your Plan B Against Economic Uncertainty. This article underscores the need for a Plan B — life insurance — financial protection for the family and loved ones in the face of life and economic uncertainties. 

10-Year Life Insurance Fully Paid: Another Milestone in My Financial Journey. This short article shares the life insurance journey of the author and reassures the need for getting one for the financial protection of the family and loved ones.