For years, Illinois law has prohibited funeral homes from being named as beneficiaries to consumers’ life insurance policies. In response to frauds committed by National Prearranged Services (NPS), many states amended their preneed laws to prohibit life insurance ownership by a funeral home. NPS had structured its preneed program as owner of insurance policies sold
Preneed
COVID and Flexible Interpretations of Preneed Contracts
The risk of COVID to family members is causing some preneed contract holders to rethink the traditional funeral they have purchased. During the early stages of the coronavirus spread, a handful of funerals were found to have been super spreader events. Dozens of attendees were infected, and several deaths resulted. Funeral homes have since implemented…
New York Times: Can I Pre-Pay without working with a funeral home?
The New York Times article on funeral planning blurs the line between pre-paying and pre-funding. The savings accounts discussed by the article are one method of pre-funding funeral costs. But the POD savings account is far less secure than final expense trusts or final expense insurance policies. The concern many consumers have is that the…
New York Times: What if I Move or Die Away from Home?
This section of the New York Time’s funeral planning article attempts to address two separate issues. The issue of what happens when the consumer moves away is one of portability and whether the preneed contract can be transferred to a new funeral home. As we discussed in our first post on the Times article, certain…
New York Times: How to Plan Your Own Funeral
Earlier this year, the New York Times ran a story that on funeral planning that raised several valid issues and recommendations. We will use the next few blog posts to explore certain issues and recommendations in greater detail. With this post we will start with the article’s discussion of prepaying for a preneed contract, and…
Nebraska Preneed Legislation – Clarifying Trust Liability
On January 30th, the Nebraska Legislature will conduct a hearing on a bill to fix a problem with the state’s preneed funeral law. The Burial Pre-Need Sale Act was originally passed in 1986, when preneed trusts invested almost exclusively in government bonds. The intent of the Nebraska law was to require the preneed…
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…
Surprise Fees? Not if You Read the Contract
A local Kansas City television station recently ran a story about a consumer’s complaint that his preneed contract did not cover “surprise fees”. The consumer had purchased the preneed contract from a Kansas City funeral home/cemetery combo where he had also purchased a grave space. One fact regarding the preneed contract that jumped out…
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…