Ch7 preneeds funeral contracts Flashcards
Funeral arrangements made in advanced of need
Preneed cases
Funeral insurance, burial insurance, savings/ trust accounts, benevolent insurance, ect are not what because they are not done with a licensed FD?
They are not preneed
Contracts would happen with preplanned or prefunded funerals?
Both
Who falls into the following roles when there is a prefunded funeral?
1. Trustee
2. Beneficiary
In a prefunded funeral, a client would give the funds to a bank to hold in a trust. At the time of death, the bank you pay the beneficiary.
1. Trustee = bank
2. Beneficiary = estate
The estate would then pay the FD for the services provided
What is a revocable contract?
A contract the can be terminated at any point
-States often required money refund along with any interest refunded
What is an irrevocable contract?
A contract that cannot be terminated
What is an irrevocable contract required to qualify for?
Medicaid
Medical insurance when retiree has sufficient funds from working after retirement
Medicare
Medical insurance when retiree doesn’t have sufficient funds
Medicaid
What is a guaranteed contract?
An agreement where the funeral establishment promises services and merchandise will be provided at the time of need for the original amount agreed upon, regardless of current economic inflation rates
What is a non guaranteed contract?
An agreement where the funeral establishment promises services and merchandise will be provided at the time of need plus any accrual due to the current economic inflation rates
What is a portable contract?
The deceased is cared for by a different FD that what was agreed upon in the preneed
What is an escrow account?
A third party holds funds until both parties have fulfilled their contractual requirements
