About Funeral Home Insurance Policies
A funeral can be an expensive undertaking, no pun intended. According to the Federal Trade Commission, total expenses for a traditional funeral average approximately $6,000, but can cost much more. To alleviate the burden on loved ones during the time of bereavement, some people elect to make their own funeral plans, including choosing a coffin, picking a burial plot and deciding whether to be buried or cremated. This pre-need planning may include pre-paying for funeral expenses or purchasing a funeral insurance policy.
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Identification
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Many funeral homes offer pre-need contracts that allow consumers to select specific items they desire for their funerals, including the casket, embalming services, flowers, headstone, burial plot or cremation urn, and transportation. These contracts, which are sometimes referred to as funeral home insurance policies, frequently provide a means for consumers to pre-pay, at current prices, the costs associated with the funeral.
Features
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The Federal Trade Commission (FTC) encourages consumers to have a clear understanding of what they are paying for when purchasing funeral home insurance. Some items that may be included in the pre-payment are the casket, a vault and funeral services. The FTC recommends consumers get a written list of all the pre-paid items from the funeral home.
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Considerations
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States have specific regulations regarding how any monies used to prepay funeral expenses are handled by the funeral home. Some states require pre-paid monies to be placed in a trust account that is accessed upon the consumer's death. Some state's allow consumers who change their minds the option of obtaining a full refund of pre-paid money plus any accrued interest. Consumers should inquire of their state's insurance commission or trade commission to determine what regulations apply locally.
Warning
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Funeral homes cannot be expected to know when a person who has a funeral home insurance policy with them has died. They must be informed. It is the responsibility of the individual who purchases pre-need services to make her family aware that these services have already been provided for.
Benefits
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The Federal Trade Commission is tasked with enforcing the Funeral Rule, which is designed to protect consumers from unscrupulous business practices. The Funeral Rule gives consumers the right to have itemized prices for all funeral-related goods and services in writing. Funeral homes may offer package deals that combine a number of funeral options, but the consumer has the right to pick individual services and goods. The Funeral Rule requires the funeral home to utilize any casket the consumer selects, regardless of where the casket was purchased, without charging an additional fee.
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References
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- Photo Credit casket image by enens from Fotolia.com
