Categories: Prepaid Funeral Plans, Consumer Rights, State Laws

Funeral preparations require more than mourning a deceased loved one. While certain people avoid the thought of making funeral arrangements, others think in terms of saving grief and claiming more value. Tens of thousands of Americans prearrange their funerals each year. Usually, it means prepaying a lump sum or the entire funeral bill.

Across the nation, each state imposes different legislations regarding the prepayment of funeral goods and services. For instance, Michigan has a fair and clearly defined law on prepaid funeral transactions. The legislation offers fairness on behalf of the consumer and the funeral home or agency. Unfortunately, there are significant disparities from state-to-state.

Certain states offer nil to minimal protection for consumers. In states like Arkansas, laws require a percentage of the funeral prepayment be added to an in a state-regulated trust. But these laws seem more like they are an income generator for the state government. As a result, consumers do your homework before you decide on a prepayment funeral plan. Use the following check list to formulate a plan:

1.       Prior to considering a prepayment funeral plan, check your state’s legislation.

2.      Next, determine what you plan to buy? Are you buying a casket, making arrangements for a crematorium, the cost of the funeral service – et cetera?

3.      Compare the cost of products and services of three local funeral companies.

For an appropriate prearranged funeral service and to protect your investment use the following questions to shop around.

§   How does the funeral company manage your prepayment? (In other words, what happens after you pre-pay?

§   How will the interest income be managed? (Will it be placed in a trust account)?

§   What kind of warranty does the company offer in case they go out of business?

§   Is the contract cancelable? How much of your money is refundable if you change your mind? (Generally, prepaid funeral plans are transferable but it costs extra).

Consumer Intelligence

1. Go with a Guarantee

Opt for a prepaid funeral plan with a guaranteed price contract. Unlike the non-guaranteed price contract, the guaranteed price contract is fixed – so the price of goods and services will not fluctuate.

2. Leave Room to Change Your Mind

Select agreements that are revocable contracts – only. These contracts are consumer-friendly because the buyer can terminate the agreement and obtain a refund. However, the refund may not be the same value as the contract's original value.

3. Consumer Beware - Check the terms of the contract

Remember to never sign an irrevocable agreement. It’s tantamount to buying a no-guarantee insurance policy. In other words, irrevocable contracts are not required to issue refunds or make other contingencies.

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