● The Funeral Rule says that a provider must inform customers when the price the provider charges the customers for cash-advance items is different from the cost the provider pays for them. It provides required wording for such cases. It is vital to add the required disclosures where the Funeral Rule specifies they must be. Do not change the punctuation, such as placing a sentence or part of one in parentheses, since punctuation may affect what the reader absorbs or ignores in the sentence. For example, according to 453.5(b) of the Funeral Rule, a funeral provider or agent is required to include the following statement: If you selected a funeral that may require embalming, such as a funeral with a viewing, you may have to pay for embalming. You do not have to pay for embalming you Comparison shopping Encourage customers to shop around and contact other service providers in the area. Prices for goods and services vary widely among homes. It is estimated that large chains charge up to 37% more for funeral services than independent or privately owned establishments. Connecticut, Massachusetts, and Minnesota require funeral homes to prominently disclose who owns the home; however, in the majority of states, a home does not need to disclose whether or not a chain has acquired it. (Chains usually have no incentive to reveal their ownership, wanting to capitalize on the “goodwill” of the name of a long- standing funeral provider, and not wishing to be linked with a chain. Therefore, when a town has a few homes, several which are owned by a large corporation, customers Advise consumers to choose carefully In a case that shook the funeral industry and its ability to treat people fairly, one preneed-funding provider had to inform 9,500 preneed contract holders that because of poor investments and fund mismanagement, the contracts might pay 12% less than face value. Funeralwire offers the following tips for consumers choosing a provider: ● Make sure the insurance or trust provider that your funeral home or agency is using has an A.M. Best rating of “A–” or better. ● Don’t use a company that allows its capital and surplus to fall below 7% of its total assets. Trust deductions and interest State regulations differ, as do the positions of the NFDA and CFA. Most states limit access by the provider until the customer dies. The FCA wants trustee fees or administrative costs deducted to be 25% or less of net annual interest earned. Minnesota prohibits the provider from charging any Equal quality Consumer complaints often occur if the merchandise the customer selected is no longer available when he or she dies. An example posted by AARP went so far as to characterize the following example as “bait and switch,” or advertising one product with the intent to substitute an inferior one. The AARP reported the story of a woman who chose a lavender casket when she made her preneed contract. After she died, the provider told the family that the lavender casket would require a special order and would take 10 days to arrive. The family unhappily accepted an “iridescent pink” casket. This is a controversial point given the fact that the time between an advanced planning contract signing and the customer’s death could
did not approve if you selected arrangements such as a direct cremation or immediate burial. If we charged for embalming, we will explain why below. Suppose a provider included this statement on your GPL, but put the second and third sentences in parentheses: If you selected a funeral that may require embalming, such as a funeral with a viewing, you may have to pay for embalming. (You do not have to pay for embalming you did not approve if you selected arrangements such as a direct cremation or immediate burial. If we charged for embalming, we will explain why below.) A reader might put less emphasis on the parenthetical statement. He or she might not realize that if the final remains will not be embalmed, he or she probably won’t need to pay for embalming. “shopping around” may not know that they’re visiting homes owned by the same company.) Discuss options other than advanced-planning contracts. Consumer publications often advise preplanning without prepaying. If one facilitates a thorough advanced planning session with a customer and his or her family, assuring him or her that the provider or agent will keep the information, then the family will use this home when the customer dies. Since at-need funerals tend to be more profitable than preneed ones, whether or not the preneed contract has guaranteed prices, preplanning (instead of prepaying) may financially benefit the provider or agent. ● Treat any nonmainstream company that offers a great deal with skepticism: Funeral directors agree that the products with the highest commissions turn into trouble later. ● Check how the company determines its preneed policy growth rate: Is it guaranteed at a certain annual percentage for the long-term future by the Consumer Price Index, or by another index? Or, do the company directors themselves determine the growth rate?
finance charges. The NFDA simply recommends that the provider disclose to the customer how much interest the provider will receive and whether or not trustee funds or other administrative charges will be deducted.
be many years. By then, the merchandise may no longer be manufactured or the provider may discontinue the offering because of its unpopularity. In order to avoid occasional customer dissatisfaction about discontinued items, it is critical to explain to the customer that there is a chance that an item he or she has chosen might be discontinued or otherwise unavailable when needed. Ordering the item when the contract is signed could be expensive for the customer, especially since the FTC recently affirmed that a provider can charge if it stores an item for a long time—specifically mentioning at-need caskets.
EliteLearning.com/Funeral
Book Code: FTX1625
Page 36
Powered by FlippingBook