Millennials and Gen Z Start Investing in Funeral Plans

Funeral Service Plans Emerging as a Financial Strategy
The 2030 generation is increasingly using funeral service plans not as a means to prepare for funerals, but as a financial strategy for future consumption. Unlike bank savings or insurance, these plans are not affected by interest rate fluctuations, and the services promised at the time of contract can be used as they are, making them an attractive option for preparing lump-sum funds and reducing spending burdens.

A trend is emerging where the 2030 generation is using funeral service products not as a preparation for funerals but as a financial investment tool for future consumption. Unlike bank savings or insurance, these products are not affected by interest rate fluctuations and allow users to utilize the promised services at the time of subscription with the contracted amount, making them an attractive option for securing a lump sum and reducing spending burdens.

Especially now, as interest rates drop again and inflation rises, the relative economic benefits of these plans are becoming more prominent. Funeral service companies are focusing on tailored marketing strategies to attract the 2030 generation as new customers.

According to industry sources on the 10th, the subscription rate of funeral service plans among the 2030 generation has been steadily increasing. Boram Sangjo saw the proportion of 2030 subscribers rise from 17% in 2021 to 30% in 2023, while Kyowon Life expanded from 18% to 20% over the same period. Daemyung I'm Ready also reported an increase in MZ generation (born 1981-2010) subscribers from 14% to 22%, and Freed Life stated that the number of new contracts from the 2030 generation more than doubled in 2023 compared to 2021.

No interest rate impact like savings and deposits
Reduces the burden of lump-sum expenses
Advantages of funeral services highlighted amid ultra-high inflation
Continuous increase in funeral service subscription rates
Aligns with subscription economy characteristics and YONO
Expanding customized products targeting 2030, such as travel, wedding funds, and wedding services

Millennials and Gen Z Start Investing in Funeral Plans

Unlike savings or insurance, funeral service plans are not affected by interest rate changes. The fact that services are provided at the set price at the time of subscription makes them an attractive choice for the 2030 generation. In particular, as the consumer price inflation rate soared to 5.1% in 2022, entering a phase of hyperinflation, the advantages of funeral service plans?where economic benefits increase as prices rise?have become more apparent.

Some analysts argue that this trend did not emerge suddenly but was a predictable change. They point out that the trend began in the mid to late 2010s, when some in the 2030 generation began to see funeral service plans as a financial tool amid a low-interest-rate environment.

For example, instead of low-interest savings, some use funeral service plans to prepare for future travel expenses or wedding funds. If someone in their early 20s subscribes and completes payments, they can later convert the plan to a wedding service at marriageable age, reducing costs. Wedding services offered by funeral service companies include wedding hall usage and support for studio, dress, and makeup (Sdeume) packages.

As the 2030 generation emerges as a promising blue ocean with high potential for new subscriptions, the funeral service industry is expanding customized products to broaden its reach. This year, Freed Life launched a membership service offering KTX discounts and a 'private transportation service' with dedicated vehicles and chauffeurs for airport, hospital, wedding, and golf transfers.

Boram Sangjo is pursuing a differentiation strategy by introducing products related to pets and bio health supplements. Kyowon Life has launched a combined product with 'LG Subscription Kyowon,' supporting LG appliance subscription fees to ease the burden of appliance purchases while preparing for future family events. Daemyung I'm Ready offers a variety of combined products through its online subscription mall 'Bucket Market,' integrating funeral, travel, and wedding services.

An industry official said, "Funeral service companies have long introduced services that can be converted to weddings or travel, and as demand from the 2030 generation has gradually become apparent, we have strengthened these services accordingly," adding, "The number of new subscribers from the 2030 generation is increasing, but cancellation and dropout rates are not high."