The Cost of Dying in Malaysia: A Breakdown


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It is often said that nothing in life is certain, except death and taxes.


Add to that the enormous cost of death and dying, and the accuracy of this quote grows on you. A mere burial plot can cost around RM8,000 to RM15,000, and that’s not counting the tombstone and funeral service and casket (or urn) and other extras.


While funeral costs may be expensive, there are some reliefs that you can get from life insurance policies and other forms of aid.

How much does a funeral typically cost?

                   

As Malaysia is a multicultural country, there are many ways a funeral can be conducted, but this also depends on the family’s preferences and what they can afford. Nowadays it is common to have the cost of embalming, casket and service all in one package when provided by a third party professional, except for Muslim funerals where it is conducted quickly and with the help of a local mosque.


For burials and coming in at the most expensive, Buddhist funerals range from RM7,000 to over RM100,00 when conducted by a third party professional. Christian funerals range from RM6,000 to RM10,000, Hindu funerals range from RM2,000 to RM6,000, and Muslim funerals start from about RM1,000.


Cremation costs RM360 for adults and RM200 for children when conducted by the Petaling Jaya City Council (MBPJ). Private funeral parlours can charge well above RM8,600.


Can Malaysians afford it?

                   

Not always (more on this below). With the average household income standing at RM5,228 as of 2016 according to the Malaysian Department of Statistics, funerals would seem to be a costly financial burden for most families in light of the general rise in cost of living.

If the death was due to a medical condition, what are the necessary steps to take around life insurance

                   

Life insurance or not, the first step in the procedure to dealing with a death is to make a police report and have an ambulance take the deceased to a hospital. To file a death claim under the deceased’s life insurance policy, you need to call the insurer as soon as possible to inform them and also fill in the required forms.


To begin with, when signing up for an insurance policy, always declare any pre-existing conditions as that will affect the extent of coverage and claim. Where the death was due to an undeclared pre-existing medical condition, there might be no claim available. Where the death resulted from a medical condition that took place after the policy was put in place, there might possibly be a claim depending on whether the disease is covered under the immediate policy.


General tip: be as specific and detailed as possible when filling up insurance forms to create a policy or make a claim, as they can substantially affect the success of both.


Is the family of the deceased entitled to any payouts from life insurance?

                    

    Yes:

    • AIA’s A-Enrich 20 provides a funeral expense benefit that is 25% of the initial sum assured.

    • Prudential’s PRUterm provides up to 100% of the sum assured and additional payments if the death occurs as a result of an accident.

      PRUmajor med 5 provides a compassionate allowance of RM2,000 on top of the sum assured for death by natural causes or accident.

    • Great Eastern Life pays RM5,000 for funeral expenses.

    • AXA Affin pays 100% of the sum insured for natural death and 200% for death by accident.

    What happens if the beneficiaries have died or are too young?

                       

    Insurance policy holders usually nominate beneficiaries in the event anything happens to them. These beneficiaries are often their spouse or children, and the payment is in lump sum form, which would not be manageable if the beneficiaries are under the age of 18.


    An alternative is the trust model, which is a controlled payment system that requires individual claims to be made to the trustee for funds to be released. If the assigned trustee has passed away, the insurer will then pay either a competent nominee, the parent of a minor or delegate it to a public trustee.


    Where only the children remain and they are under age, the sum will be passed on to a public trustee.

    Are there any BR1M payouts or government aid? What are some other ways we can cover the funeral cost?

                        

    If the deceased was registered with BR1M, only the guardians / parents / siblings can apply for BR1M payouts. The following documents should be presented to the bank for issuance of BR1M payments: death certificate and MyKad copy of the person making the claim. For a list of BR1M-listed banks, click here.


    The Selangor government has the Skim Mesra Usia Emas (SMUE) that pays up to RM2,500 to selected representatives of the deceased. Proof of residence within the Selangor state must be demonstrated by both.


    KWSP (EPF) pays an RM2,500 death benefit to the deceased’s next-of-kin so long as this person is a Malaysian person, has not exceeded the age of 60 at the time of claim, and applies for the claim within 6 months of the passing of the deceased.



    With land area quickly becoming scarce in Malaysia and with the rising cost of living, it is definitely advisable to be aware of the benefits you’re entitled to under life insurance in the event of a tragedy!