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
Insurance Funded
A Treasury Market Out of Whack: Insurers and Preneed Consumers
By Bill Stalter on
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…
No Relief from the Federal Reserve: the September Announcement
By Bill Stalter on
For an industry that has been dependent on interest income, the past 9 years have been tough on the death care industry. Interest rates started to decline 9 years ago, with the bottom hitting in 2008. Zero interest rates forced death care fiduciaries to diversify into equity investments, but trusts have experienced a sideways market…
Trust Funded Preneed and Insurance Assignments
By Bill Stalter on
Posted in Compliance, Exams/audits, Guaranteed, Insurance Funded, Non-guaranteed, Preneed, Recordkeeping, Trust Funded
Funeral homes frequently allow the assignment of insurance as partial payment towards a trust funded preneed contract, but the manner in which the assignment is made can cause problems for them. Preneed trustees will not accept an insurance policy for a host of reasons. Insurance proceeds paid to a trust are not tax free and…
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…
Plaintiff’s Star Witness: Doug Cassity
By Bill Stalter on
The NPS civil trial is scheduled for trial in February 2015, and the SDR’s strategy took a twist when her litigation team filed a motion to dismiss Doug Cassity as a defendant in the lawsuit. The dismissal probably signals the SDR’s intent to use Mr. Cassity’s testimony. Now convinced that Mr. Cassity does not have…
Out of Left Field: Missouri’s insurance assignments
By Bill Stalter on
Who can honestly say they saw this one coming?
On July 5, 2012, the Missouri State Board of Embalmers and Funeral Directors filed a complaint with the Missouri Administrative Hearing Commission against a Missouri funeral home for alleged violations of Chapter 436, including several transactions that predate Senate Bill No. 1. So, three years after the …
Missouri and Mrs. Smith’s insurance policy: Where to draw the line?
By Bill Stalter on
Every funeral director has faced the situation where Mrs. Smith comes in with an insurance policy and her funeral plans. Often, Mrs. Smith has gone to trouble of designating the funeral home as the policy beneficiary before having discussed her plans with the director. Often funeral directors file the policy and plan away until Mrs.
Another factor in the cremation trend: preneed insurance premiums
By Bill Stalter on
Posted in Cremation, Guaranteed, Insurance Funded, Preneed, Preplanning, Price Protection, Price Protection
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…