Today, aside from some municipal cemeteries, nearly all funeral homes and cemeteries are selling services and merchandise in advance of need. Pre-need contracts are beneficial to both the consumer and the death care firm marketing them. However, the degree of sales and the method varies drastically across the country, largely because states have different rules and regulations governing these contracts.
Specifically, states’ rules and regulations differ regarding the type of funding vehicle that may be used, the amount of the contract that must be trusted (invested), and the amount that may be withdrawn.
Consistently, we read about firms that have neglected to follow their state rules and regulations and have thus broken the law. And each instance affects the entire death care profession by decreasing public trust.
It is imperative for every firm to know the governing state’s rules and regulations. Up for consideration for each firm are the following policies and procedures that will protect firms and consumers served now and in the future:
• Do you know what the advance planning consular is telling the consumer? Is the consumer offered all their options, or is the consular just getting a sale?
• Contracts must be reviewed by a knowledgeable person to see if everything is listed correctly. If items have not been included, does the consumer know that they will be responsible for those items at the time of need?
• Does the pre-need file have all the documentation that the firm requires?
• Are the FTC disclosures completed in the funeral home sales? Also, are the price lists given/offered at the correct time?
• Are non-guaranteed contracts used when they should be?
• What is the condition of the “sales kit,” and does it have all the information the firm wants in it?
• Is there a clear description of what services and merchandise were selected and paid for?
• Are the contracts pre-numbered and tracked to make sure every contract is accountable?
Another problem is most pre-needs do not mature into at-needs for years after they are written. When the information is written sloppily and hard to read, it is difficult on the staff person who is servicing the pre-need in the future. Also, as the merchandise changes over the years, the office should keep documentation of comparable products to replace discontinued items.
Policies and procedures protect firms and can even provide the benefit of additional revenue at the time of need while protecting the trusting consumer.