The funeral expense is becoming expensive. It will lead to funeral poverty whereby the next of kin of the deceased face difficulty paying funeral expenses. Increasing numbers of people seek financial management advice following bereavement, which can have a long-term effect on the grief experience and an individual's ability to manage. More should be done to encourage people on low incomes to prepare for death through simple advice and guidance. In Malaysia, a funeral social fund such as the Khairat death fund, in general, is financial assistance that is a grant to the family of the deceased for covering the cost and expenses of funeral processes. Khairat death fund was managed by community members or organizations in the areas. However, all this Khairat death organization moving with their own way as there is no legal jurisprudence as guidance to regulate and to be more systematic and synchronize management. Hence, this study will review regulation and governance for the funeral social fund in Malaysia.

Khairat Death Fund, also known as Khairat Kematian, is an organization that plays an important role in the Malay Muslim community in Malaysia. Its main role is to ensure that the death of a Muslim is handled in an appropriate manner. In Malaysia, the Khairat Death Fund is administered by either the qaryah Mosques or the local village associations. Both entities are responsible for administering the fund. Nevertheless, the research and development efforts of Khairat Death Fund have not yet reached the optimal level. Therefore, this paper aims to analyze some of the issues and challenges faced in managing the Khairat Death Fund to ensure that it continues to play an important role as one of the Islamic financial instruments. This study is important because it will help the Khairat Death Fund management organizations and related bodies to take measures that will eventually allow the Khairat Death Fund to be raised and developed as one of Islamic financial instruments. This research adopted a qualitative approach that involved conducting semi-structured interviews with four organizations involved in the management of Khairat Death Fund. The results of this study indicate that Khairat Death Fund organizations are facing with six of issues and challenges which are, low awareness, delay of annual fees payment, differences of costs for muslim funeral, limited investment strategy, cancellation of coverage and uncover group and differences of khairat death fund fees and benefits. It is hoped that this study will contribute to achievement the development of Khairat Death Fund to be more innovative and competitive product in future.