Tips for Buying Preneed and Final Expense Insurance

As you can probably tell from my previous posts I am a firm believer of preplanning, whether it is your or a loved ones funeral. Planning for the future is just another way to have a little hedge on inflation and it makes good sense financial and otherwise.
I suppose my reasoning comes from being in and around funeral business for so many years and have seen what a funeral and its expense, at a very vulnerable time, can do to a family, sometimes things are purchased that are really not needed only done to make the arranger feel they have done the right thing.
I am a big supporter of the preplan process. You don't have to prepay, altho' it makes good sense, but let your wishes be known. Don't leave the decisions to a son or daughter that is in enough pain having to deal with a death, but knowing what you would have wanted takes some of the stress away and allows the family to handle the other processes with a little more dignity, not having to ask another family member for help.

Some tips for those considering preneed insurance.

Find out your state laws on preneed insurance.
Before buying a funeral policy, discuss your options with your family and lawyer to make sure it's consistent with your will and estate plan.
Verify the insurance license of the funeral director or preplanner.
Take advantage of any "free look" laws your state might have to review your policy before you are locked in.
The FTC's "Funeral Rule" requires funeral homes to give you a written price list of available goods and services.
Find out if your funeral director provides price guarantees. If not, the money you pay today may not cover the cost of your future funeral.
Do not accept any documents that have not been completely filled in and signed in your presence.
Make sure the funeral arrangements can be moved to any funeral home at any time. This is important, especially if you move after buying the "preneed" plan.
Check all of the arrangements, services and products sold as part of the "preneed" plan, and make sure those details are spelled out in writing.
Make sure you receive at least one statement each year detailing the status of your account.
Know what happens if you stop paying premiums on your preneed insurance policy.
Find out if you can cancel your preneed insurance policy.

A traditional funeral including a casket and vault, costs about $6000, according to the FTC and additions such as obituary notices, flowers and limousines easily run up to total over $10,000.

There are plenty of reasons to preplan and prepay your final arrangements long before the need arises.

One being inflation,another letting your wishes be known, and a third peace of mind. However, be sure you do your homework and follow the tips above and work with a reputable and "family owned" funeral home. I suggest family owned as they usually have your best interest as heart. They are not usually only interested in the bottom line and they have a reputation to uphold.

Be prepared, your loved ones will thank you for it.

Consumer Tips for Preneed Arrangmements

Here are some consumer tips for making preneed plans for your or your loved ones funeral.
•Be certain the funeral home, mortuary, cemetery, or licensed insurance producer is licensed with state as a preneed contract seller.
•Ask a family member to accompany you while making the preneed funeral arrangements.
•Ask the preneed seller for a detailed price list of services and merchandise before you select anything.
•Before signing a preneed contract, read it carefully and understand all the provisions. Ask questions.
•If you purchase a preneed funeral arrangement, you should receive a copy of the contact that explains your rights and obligations, along with a written statement of all service and merchandise that you have purchased and the price.
•The contact must clearly state how it is funded (life insurance or trust-funded) and the perms of payment.
•If you are purchasing a trust-funded product, ask how your funds are secured.
•The written contact must state under what terms you may cancel your preneed contract ad how much you will be refunded.
•The written contract is required to include to what extent the preneed seller or general provider is guaranteeing the prices of the merchandise and services you select. If the prices are not guaranteed, the preneed seller should explain who is responsible for paying additional monies that may be due at the time of the funeral.
•Thoroughly consider before accepting an irrevocable agreement (a contract that cannot be canceled). Irrevocable agreements may limit your flexibility.
•Keep a copy of your plan in a safe place. Tell a close family member or a friend that you made arrangements and where the documents are kept.

These are some ideas you should be aware of when purchasing or researching preneed arrangments for yourself or a loved one.

What to know about financing funerals....

Here is the final part of our discussion on Pre-Arranging your or your loved ones death.

Financing Funerals

There are a number of options for financing funerals, and when you pre-plan your funeral, you can take advantage of the best program for you. Options include preneed insurance policies, bank or funeral trusts, life insurance, and annuities. But which one's right for you?

How to Pay for a Funeral
Today, the cost of dying is at an all-time high. Average cost of a funeral is approximately $6,000. But there are ways to beat the high costs. How to Pay for a Funeral

I'm not afraid of death. I just don't want to be there when it happens-Woody Allen

Like it or not, death will visit even those who don't want to be there when it happens. And like it or not, death is a costly affair. To beat the high cost of dying, more people are starting to consider preplanning and prepaying.
It is estimated that more than a million people will consider making prearrangements. It takes away the guesswork.
When you prearrange, you have control of the decisions relating to your death--the disposition of your body, the funeral or memorial services, what you want your obituary to say about your life, and a reasonable budget which will ease the financial burden for your surviving members.
If you wait until the last minute, it's too stressful, for you're at the worst day of your life to make decisions. But preplanning is simply making arrangements ahead of time. Preneed means prepaying, and preneed programs are actively sold by mail, by telephone and in homes.
In fact, billions are invested in all kinds of prearrangement contracts.

Funerals as a Consumer Product
Funerals rank among the most expensive purchases many consumers will ever make. Here are some things to think about. Funerals rank among the most expensive purchases many consumers will ever make. A traditional funeral, including a casket and vault, costs about $6,000, although extras like flowers, obituary notices, acknowledgment cards, or limousines can add thousands of dollars to the bottom line.
Many funerals run well over $10,000.
Yet even if you're the kind of person who might haggle with a dozen dealers to get the best price on a new car, you're likely to feel uncomfortable comparing prices or negotiating over the details and cost of a funeral, preneed or at need.
Compounding this discomfort is the fact that some people "overspend" on a funeral or burial because they think of it as a reflection of their feelings for the deceased.

Funeral Costs
Funeral costs include a basic services fee for the funeral director and staff, charges for other services and merchandise, and cash advances. Funeral costs include:
1. Basic services fee for the funeral director and staff
The Funeral Rule allows funeral providers to charge a basic services fee that customers cannot decline to pay. The basic services fee includes services that are common to all funerals, regardless of the specific arrangement. These include funeral planning, securing the necessary permits and copies of death certificates, preparing the notices, sheltering the remains, and coordinating the arrangements with the cemetery, crematory or other third parties. The fee does not include charges for optional services or merchandise.
2. Charges for other services and merchandise
These are costs for optional goods and services such as transporting the remains; embalming and other preparation; use of the funeral home for the viewing, ceremony or memorial service; use of equipment and staff for a graveside service; use of a hearse or limousine; a casket, outer burial container or alternate container; and cremation or interment.
3. Cash advances
These are fees charged by the funeral home for goods and services it buys from outside vendors on your behalf, including flowers, obituary notices, pallbearers, officiating clergy, and organists and soloists. Some funeral providers charge you their cost for the items they buy on your behalf. Others add a service fee to their cost. The Funeral Rule requires those who charge an extra fee to disclose that fact in writing, although it doesn't require them to specify the amount of their markup. The Rule also requires funeral providers to tell you if there are refunds, discounts, or rebates from the supplier on any cash advance item.

Calculating Funeral Costs
The funeral provider must give you an itemized statement of the total cost of the funeral goods and services you have selected when you are making the arrangements. The funeral provider must give you an itemized statement of the total cost of the funeral goods and services you have selected when you are making the arrangements. If the funeral provider doesn't know the cost of the cash advance items at the time, he or she is required to give you a written "good faith estimate."
This statement also must disclose any legal, cemetery, or crematory requirements regarding specific funeral goods or services.
The Funeral Rule does not require any specific format for this information. Funeral providers may include it in any document they give you at the end of your discussion about funeral arrangements.

The Federal Trade Commission Funeral Rule and You

from the Federal Trade Commission
Most funeral providers are professionals who strive to serve their clients' needs and best interests. But some aren't. They may take advantage of their clients through inflated prices, overcharges, double charges, or unnecessary services. Fortunately, there's a federal law that makes it easier for you to choose only those goods and services you want or need and to pay only for those you select, whether you are making arrangements preneed or at need.
The Funeral Rule, enforced by the Federal Trade Commission, requires funeral directors to give you itemized prices in person and, if you ask, over the phone. The Rule also requires funeral directors to give you other information about their goods and services.
For example, if you ask about funeral arrangements in person, the funeral home must give you a written price list to keep that shows the goods and services the home offers. If you want to buy a casket or outer burial container, the funeral provider must show you descriptions of the available selections and the prices before actually showing you the caskets.
Many funeral providers offer various "packages" of commonly selected goods and services that make up a funeral. But when you arrange for a funeral, you have the right to buy individual goods and services. That is, you do not have to accept a package that may include items you do not want.
According to the Funeral Rule:
• you have the right to choose the funeral goods and services you want (with some exceptions).
• the funeral provider must state this right in writing on the general price list.
• if state or local law requires you to buy any particular item, the funeral provider must disclose it on the price list, with a reference to the specific law.
• the funeral provider may not refuse, or charge a fee, to handle a casket you bought elsewhere.
• a funeral provider that offers cremations must make alternative containers available.



Preneed Funeral Planning
No one likes to think about death, let alone plan for it. But, to help relieve their families of some of these decisions, an increasing number of people are planning their own funerals.

Financing a Funeral or Memorial Service
Inflation will increase these costs over time; in fact, average funeral prices have tripled in the last 15 years. Find out how to protect your investment.

Why Pre-Fund a Funeral?
"Cost of living increases--my income can't keep up; now my funeral cost will remain the same."

Financing a Funeral or Memorial Service

Cemetery charges and the cost of a monument or marker are extra charges, over and above the cost of the funeral. Inflation will increase these costs over time; in fact, average funeral prices have tripled in the last 15 years.

A funeral is an essential expenditure, and a little planning will eliminate the uncertainty of costs and payment. If you don't plan for funeral expenses, you run the risk of your family having to ask friends and relatives to share an unexpected financial burden, which can put everyone in an embarrassing and uncomfortable position. And if you borrow money, it has to be repaid.

Why Should I Pre-Plan? Part 3

Funeral Planning Step by Step

"To everything there is a season and a time to every purpose under the heaven. A time to be born, and a time to die."--Ecclesiastes 3:1-2.
No one wants to talk about death and funerals. Too depressing. Too macabre. Better to gather friends and talk about fun things, like popular TV shows, the latest items I the news or even the gossipy stuff. Unfortunately, death is a fact of life and there simply is no way to avoid it. For indeed there is a "time to be born and a time to die." When someone dies, we hold a funeral, a word related to a Sanskrit term meaning smoke, which refers to an ancient custom of cremating the dead.
Today we also cremate our dead, but the most common disposition is to hold a funeral or ceremony and bury our dead under or above ground. Through a funeral, we pay our last respects and celebrate the life of a departed loved one.
But the cost and the details involved in a funeral can be overwhelming. So planning ahead gives one peace of mind and eases the emotional and financial strain of those left behind. What to do?
How to Choose a Funeral Service Provider

Many people don't realize that they are not legally required to use a funeral home to plan and conduct a funeral. However, because they have little experience with the many details and legal requirements involved and may be emotionally distraught when it's time to make the plans, many people find the services of a professional funeral home to be a comfort.
Consumers often select a funeral home or cemetery because it's close to home, has served the family in the past, or has been recommended by someone they trust. But people who limit their search to just one funeral home may risk paying more than necessary for the funeral or narrowing their choice of goods and services.
Comparison shopping need not be difficult, especially if it's done before the need for a funeral arises. If you visit a funeral home in person, the funeral provider is required by law to give you a general price list itemizing the cost of the products and services the home offers. If the general price list does not include specific prices of caskets or outer burial containers, the law requires the funeral director to show you the price lists for those items before showing you the items.
Sometimes it's more convenient and less stressful to "price shop" funeral homes by telephone. The Funeral Rule requires funeral directors to provide price information over the phone to any caller who asks for it. In addition, many funeral homes are happy to mail you their price lists, although that is not required by law.
When comparing prices, be sure to consider the total cost of all the items together, in addition to the cost of individual items. Every funeral home should have price lists that include all the items essential for the different types of arrangements it offers. Many funeral homes offer package funerals that may cost less than purchasing individual items or services. Offering package funerals is permitted by law, as long as an itemized price list is also provided. But only by using the price lists can you accurately compare total costs.
Preneed Funeral Planning Checklist

Our preneed checklist shows you how many decisions must be made by a family member at the time of your death. This does not include choosing a casket or urn and outer burial container, notifying relatives, preparing a family history for the obituary, arranging for floral displays, etc.
By taking time now to consider the items below, you can make your wishes known to your family. You might even consider formalizing your preneed arrangements with a funeral director, which would allow you to complete all of your arrangements now.
• Name of church (if service to be held)
• Clergy to preside over service (name)
• Music? Vocal? Instrumental?
• Special musical selections?
• Would you like to have a visitation?
• Open casket? Closed casket?
• Funeral home preference?
• Obituary?
• Names of pallbearers
• Memorial contributions
• If veteran, flag on casket? Folded?
• Clothing
• Glasses
• Jewelry
• Location of cemetery property and deed
• Type of property: burial space/lawn crypt/mausoleum/niche
• Other instructions

Life Insurance versus Pre-Arrangement Insurance

Life insurance -Way of providing a legacy – a plan under which regular payments are made to a company during somebody’s lifetime, and in return the company pays a specific sum to the person’s beneficiaries after the person’s death. Encarta Dictionary
Pre-Arrangement Insurance - Way of providing your loved ones with a plan for the disposition of your body upon death. In this case as in the life insurance plan you are providing a legacy, but one that is specific in its use, it is to be used for funeral expenses and final disposition of remains. Set-up with a local funeral home or cemetery with them as the assignee of the policy upon the death of the insured.
A life insurance policy and a prearrangement policy are very similar in nature as they are paid for in payments (premiums) or at once, depending on the affluence of the owner of the policy, but most policies are paid for at regular intervals, being monthly, annually or at some other pre-determined rate. However, a life insurance is for the beneficiary to use to continue with life and the prearrangement policy is used for the final expenses of the insured.
Pre-planning is a very sound and thoughtful decision to make for your loved ones. It not only makes your wishes known, but it also prepares you for the inevitable and relieves the burden from other members of your family at a time when they are most vulnerable and stressed.