For consumers who need installments to pay for their preneed arrangement, funeral directors report that the $100 monthly payment is the comfort threshold for most individuals. For a widow planning her own funeral, the $100 monthly payment will require an installment term of six years or longer. If the widow needs to also cover an
Price Protection
A Treasury Market Out of Whack: Insurers and Preneed Consumers
In a prior post, we used Allan Sloan’s article on the Treasury bond market to discuss the impact on preneed insurers and their funeral home clients. The Treasury market has forced preneed insurers to lower their policy returns, which has a direct impact on the profitability of funeral homes. To make insurance funding more profitable…
A Treasury Market Out of Whack: Preneed Insurers and Preneed Sellers
In our last post, we used Allan Sloan’s article on the Treasury bond market to highlight the investment exposures to death care trusts. Today we will look at how the Treasury market is also impacting funeral homes that rely upon insurance for preneed funding. Mr. Sloan’s article alluded to insurance companies being required by statute…
Installment Payments and Preneed: At the cost of the seller
A preneed client recently complained about preneed shortfalls they were experiencing on trust funded contracts. We went back to our 2014 blog post (The Factors Contributing to Preneed Shortfalls: Investment Return and Operator’s Performance Costs) and began an analysis of those factors. Since the ‘culprit’ is usually poor investment returns, we started with…
Preneed Shortfalls: Performance Cost Increases
In our prior post we discussed two factors to preneed shortfalls: investment returns and the operator’s performance cost increases. The Funeral Consumer Alliance of Greater Kansas City conducts an annual survey of the region’s funeral homes to track the price increases on their General Price Lists. A couple days after our post, the Kansas City…
The Factors Contributing to Preneed Shortfalls: Investment Return and Operator’s Performance Costs
When the Federal Reserve recently announced the end of the quantitative easing program, it did so with a hint that any increase in interest rates could be a considerable time off. Several global factors may now cause interest rates to remain at unprecedented lows for longer than what the Fed had suggested last December. As…
My Preneed Account: Interest Alone Won’t Cut It
Since President Obama unveiled the new MyRA as his plan to revive Americans’ saving habits, we have been making comparisons between funding for retirements and preneed. Like the MyRA, the non-guaranteed preneed contract could represent more of an introduction to preplanning funding than the final preneed product. As the AARP acknowledged a few years ago,…
Another factor in the cremation trend: preneed insurance premiums
Our preneed provides peace of mind by freeing your family from the burdens of rising funeral costs and from making difficult decisions during their time of grief.
Since the inception of the transaction sixty years ago, that statement has defined preneed marketing. Even the AARP recently embrace the peace of mind concept. The inflationary…
Trust Funded Preneed and Finance Charges
The funeral director’s decision about how to fund his preneed is influenced by the state’s trusting requirement, investment returns, administrative convenience and the volume of preneed business. Essentially, there are three methods of funding preneed: the depository account, the master trust and the insurance policy.
The funeral director’s use of the depository account predates all…