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Common abuses of Pre-Planning Contract structureA proper funeral pre-arrangement contract should include some basic guidelines. All merchandise and services information should be on ONE page. If the contract is split, one page services, one page merchandise, this will allow the seller to skirt the F.T.C. rule for price disclosure. It also allows the seller to skim 30% of your funds for their own use from the merchandise sale. The state Board of Funeral Directors does not approve of these types of contracts. Disbursement of Interest When interest accrues in your pre-arrangement account, it combats the rise in inflation compared with the price of the funeral. Within the fine print of some contracts you will see the funeral home's right to keep your interest if you should default or cancel. Proper funeral preplan programs return all funds plus any accrued interest. Payments Payments or installments should be made directly to the trust holder (bank or insurance company). Payments made into the funeral home are highly questionable. How do you know that they are going into your account? Payments made directly to your account will prevent funeral home skimming or fraud. Trustee Proper funeral preplan contracts assign a bank or insurance company within the Commonwealth as your trustee. The bank or insurance company's complete address should be located on the contract so that you can contact the trustee directly. You should not allow the funeral home or seller to become the trustee. Taxes A good preplan program will invest your money in a tax-free vehicles. Funeral plan that do not provide this feature are not designed to work for the consumer. Prices Some funeral homes induce you to buy because of their low monthly payments. Many of these firms severely inflate their prices so that they will not lose on extended payment programs. Shop around! Sales Practice It goes without warning, be aware of door to door & telephone salespeople. Remember that they work on commission and have only one goal in mind. The federal Government has strict rules on these practices. Do not settle for the first thing coming down the pike. Before you sign up, do research, shop around, talk to family, friends or an attorney. When you think that you have enough information, you decide. Remember salesman are trained to be smooth. Fees Any funeral preplan that retains a part of the purchase price or charges you an arrangement fee is not to be trusted. Remember you are giving them your business. Incomplete contracts Some funeral contracts do not cover certain expenses (i.e. Newspaper notices, Clergy fees, cemetery expenses etc.) When someone decides that they want to plan a funeral, they usually want to make it as complete as possible. Look for a program that allows you to be as definitive as possible. Learn more about your rights as a consumer. |
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