Travel Gains Attention Over Funerals as Life Expectancy Rises
Lower Financial Burden and Higher Customer Satisfaction by Using Prepaid Funds
Conversion Services Provide a 'Win-Win' for Both Customers and Companies
Funeral service plans originally subscribed to for funeral preparations are gaining attention as practical travel products. This is because customers of major funeral service companies are actively using 'conversion services' that allow them to enjoy current travel instead of future funerals by utilizing their existing payments. From the customer's perspective, the range of choices expands, and from the funeral service companies' perspective, it is evaluated as a 'win-win' effect that lowers cancellation rates.
According to the industry on the 26th, cases of customers of major funeral service companies such as Freed Life and Kyowon Life choosing travel instead of funerals by using their existing payments have surged in recent years. At Freed Life, the proportion of conversion service cases in total performance more than doubled compared to 2022. Also, the share of travel in total conversion service usage expanded from 45% in 2022 to 70% in 2023, reaching 75% last year.
Kyowon Life also saw the proportion of cases converting funeral services to other services more than double last year. Among these, the proportion using travel services soared from 17% in 2022 to 50% in 2023, and up to 75% last year. This means that 7 to 8 out of 10 customers who converted services chose travel. Boram Funeral Service also reports increasing demand for conversion services, with cruise travel in particular gaining popularity as suppressed demand exploded after COVID-19.
The reason travel services are especially attracting attention is that they can provide immediate satisfaction. La Mo (65), who traveled to Europe through a travel conversion service of a funeral company last October, said, "I was able to enjoy the European trip I wanted without a large financial burden by using the funeral payments like a travel savings plan."
The background of this change is analyzed to be the extension of life expectancy and changes in consumption patterns. According to Statistics Korea, the life expectancy of Koreans was 83.5 years as of 2023, which is a globally high level following Japan and Switzerland, representative longevity countries. An industry official said, "While future funerals are important, the value of travel that can be taken today is also being emphasized," adding, "As life expectancy increases and customers' lifestyles diversify, the funeral service industry is also expanding convertible services."
Expanding conversion services also serves as a strategic means for funeral service companies to reduce cancellation rates. As life expectancy lengthens, the need to prepare for distant future funerals relatively decreases, and consumption tendencies to enjoy current life strengthen. Professor Eunhee Lee of Inha University’s Department of Consumer Studies said, "For the funeral service industry to retain consumers, it is necessary to induce a lock-in effect," and added, "It is necessary to actively develop and propose various conversion services tailored to the target customer base."
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