While some choose to believe otherwise, people in the funeral business will tell you that 2020 was a busy year. Contrary to misleading Facebook posts, the US saw over four hundred thousand excess deaths over the past twelve months. These obviously include deaths caused directly by COVID-19, as well as deaths caused by other diseases which were precipitated by COVID-19.
Even for those of us lucky enough to have remained healthy and seen our families remain healthy, it has been almost uniformly a tough time. Whole industries have struggled, with businesses closing down and millions of people losing their jobs.
It is therefore strange and a little bit morbid to think about how some industries have flourished instead. The obvious beneficiaries are makers of hand sanitizer and face masks. However, the one we would mostly prefer to avoid is the industry of death – or death-related businesses.
With the COVID death toll alone close to 400,000 and expected to surpass 500,000, death-related businesses have the opportunity to profit, while facing some unexpected challenges.
Have these businesses actually been boosted by COVID-19? Or are there other aspects at play which have tempered their success?
The Funeral Business
Funeral homes have seen an uptick in business, with far more deaths to attend to than during regular times. However, this does not mean they have necessarily benefited from the pandemic. The reality is that there are a number of other factors at play which impact their profits.
Most significantly, much of the pomp and fanfare that traditionally happens at funerals is no longer safe. There have been cases around the world of funerals ending up becoming superspreader events, leading to dozens more deaths. Therefore, funerals in the time of COVID are smaller. Indoor services are eschewed in place of short graveside ceremonies. Limousines are not used to drive mourners to the cemetery.
Furthermore, because people are struggling to pay the bills having lost their jobs, they are not spending as much on fancy coffins either. Many people are choosing to have their loved ones cremated instead, avoiding the cemetery altogether.
While some funeral homes have managed to profit from COVID’s devastation, for many others it has been an exercise in managing expectations, providing as good a service as possible, without the opportunity to upsell to wealthy clients.
It is not the industries that directly profit from death that are particularly growing during this time. And even those funeral businesses that are profiting know that this growth is unsustainable. If more deaths equal more money, the moment things go back to normal, profits shrink.
Rather, it is the industries connected to death that are seeing long term changes – those that provide services in preparation for it. The life insurance industry is an interesting example.
COVID has certainly led to life insurance policies lapsing because of unemployed clients unable to pay. Furthermore, many more policies are being paid out sooner than expected.
However, the life insurance industry was dwindling before COVID. Now, more people are realizing just how important it is to have life insurance. People – especially young – who would otherwise have put off thinking about getting a policy are now going for affordable options. At scale, this gives the life insurance industry quite a boom. Many of these policies will be retained even after the pandemic is over and people stop thinking about death as much.
Another industry that is experiencing a boom in the time of COVID is the online will maker industry. Online will makers are perfectly placed to benefit from COVID-19. Everyone needs a will and everyone can afford to make one. With people doing more online than ever before, creating a will online has become the natural option.
Furthermore, any sales done by online will makers are not going to drop away once the pandemic is over. Unlike the insurance industry, which needs to account for the inevitability of lapsed policies, once a will is made the transaction is over.
Since online will makers are inexpensive (or free and paid for in advertising), it is an industry that benefits from the sheer scale of potential clients. And, since those clients are necessarily living, it is not an industry that is set to suffer when COVID stops killing people.
Of course, there is the likelihood that fewer people will think about making a will once they don’t have a pandemic to motivate them. However, this won’t harm past business, and there will still be an increased awareness of the industry.
COVID-19 has taught us a lot about the world which we may not have wanted to learn. It turns out that death is not necessarily good for funeral businesses, while it can benefit those related industries that thrive on planning for the future.