Funeral mutual aid funds are a community welfare savings system based on the principle of kindness and mutual assistance during times of death, intended to provide families of the deceased with financial resources for funeral expenses and to avoid burdening their children.
However, in recent years, news of these funds collapsing in various areas has become common. Here is an in-depth summary of the causes and issues involved.
The basic principle is that when a member dies, the remaining members each contribute a small amount (for example, 10-50 baht), pooling these to form a large sum for the deceased's heirs.
The main objective is to create universal income security, especially for the elderly or low-income groups who do not have access to private life insurance systems.
The reasons many funeral funds can no longer continue go beyond missing money; they are structural problems as follows:
1. Aging Society
This uncontrollable factor arises because most members are elderly, naturally leading to a higher death rate. Consequently, remaining members must contribute more frequently, shifting from monthly payments to several times per week, causing members to struggle with the burden and withdraw.
2. Lack of "Younger Generation" Replacements
Funds require continuous new enrollments, but younger people often see contributions as not worthwhile or prefer more secure life insurance. Without new members to share costs, the entire financial burden falls on older members, causing collected funds to steadily decline.
3. Unprofessional Management
Many funds are run by village committees lacking financial or actuarial knowledge:
Corruption: Fund money is embezzled for personal use or invested improperly.
Opaque Accounting: Members cannot verify how their contributions are used.
4. Unfavorable Laws and Regulations
Some funds are not registered under the Funeral Mutual Aid Act, resulting in a lack of government oversight. When payment defaults occur, members find it difficult and time-consuming to pursue legal action.
Summary of the Problem Cycle: From Hope to Burden
Stages | Situation |
Initial Stage | Many members, few deaths, low payments, but large lump sums. |
Crisis Stage | Members age, deaths increase, payments required weekly, members begin to drop out. |
Collapse Stage | Collected funds insufficient to pay heirs, committees delay payments, ultimately leading to closure. |
The closure of many funeral funds reflects that "goodwill alone is not enough." Managing community welfare today requires transparent accounting systems, accurate risk assessment, and legal certification to prevent life's final funds from being lost.
Important Note: If you plan to join a funeral mutual aid fund, check whether it is registered with the Ministry of Social Development and Human Security (MSDHS) to ensure a basic level of assurance.