It is very important
that you always read a preneed contract very carefully and
make sure you understand each provision before you sign.
Every preneed contract
should include the following components to protect all parties in the
- Identification of the seller (the funeral home provider), purchaser and person for whom the contract is purchased
- Identification of trustee or insurer when applicable
- Rights and obligations of all parties
- Complete description of all goods and services purchased and their specific prices
- How the contract is to be funded
- How substitutions may be made if goods or services are unavailable at time of need
- Ability-to-transfer agreement or funding to another funeral home
- Effect of a change in beneficiaries
- Where and amount of funds deposited until the funeral occurs
- Tax implications, if any
- Party responsible if additional funds are due at time of need
- Party to receive any excess funds
- Cancellation and refund policy
Effect of missed or late payments
- What is included or excluded in any price
*There may be goods
and services required at the time of the funeral that are not part of a preneed
contract since they cannot be paid in advance. Always ask for
clarification about the handling of any items that may still be needed when
Questions to Ask
Before you make any decisions or
sign any contract it is important to ask questions of the advance funeral
planning professional. Below are some suggested questions. Write
down any others you might have.
- Is a license or permit required in
this state for you to sell preneed contracts? If so, do you have a license or
- What is the name and address of the
agency that regulates preneed in this state?
- Please explain the difference
between the basic services fee for professional services and the other services
that might be listed in the contract. Why are there two types of charges?
- Please carefully explain any price
guarantees and any items that are not covered in my contract.
- What happens if I want to change the
type of funeral service or what I’ve purchased at a later date?
- What happens if my family wants to
make changes at my death?
- If I need the services of two
funeral homes in two different states, will there be two separate bills?
- What happens if there isn’t enough
money to pay for the funeral when I die?
- If I change my mind after signing,
how much time do I have to cancel and have my deposit returned? If I cancel
after the time limit has expired, what will I be refunded?
- How do I know my money is
safe? Who do I contact to ask at any time about the status of my account?
- What happens to my contract if the
funeral home goes out of business or changes owners?
- Is there any other vital information
I need to know about possible additional charges, documents I’ll need, the
cemetery purchase, graveside charges or ground or air transportation?