● Communication, including assistance with price negotiation, by concierge staff directly with funeral providers, allowing families to avoid the traditional sales focus. ● Assistance in the selection of caskets and funeral products. ● Travel arrangements, including flights, car rentals, and hotels. ● Event planning such as venues, restaurants, florists, and design or catering services. ● Assistance with insurance claims. ● Pet funeral services, including cremation and burial with owners.
The Internet, social media, and apps give consumers access to extensive information regarding funeral practices and options 24 hours a day, seven days a week. Consumers can research religious traditions and incorporate these traditions into their funerals. They can learn about federal regulations and industry requirements that may require professional assistance when planning green events. They can even buy a casket at a chain store or from an independent carpenter. The new mainstream funeral industry is likely to continue. When some states attempted to ban consumers from buying caskets from certain vendors, these regulations were not passed.
TRENDS IN FINANCING FUNERALS
Preneed sales Consumer organizations concerned with funerals, such as the American Association of Retired Persons (AARP) and the Funeral Consumers Alliance (FCA), encourage preplanning, noting that the process of making these arrangements can benefit customers and their families (FCA, 2015; Herman, 1999). Some people see death as the ultimate loss of control, and preplanning for death allows them to confront these issues. Additionally, families that preplan tend to learn more about the preferences of the family member who is the customer and are better prepared to carry out their end-of-life plans. Preplanning and prepaying are not the same, and the AARP and the FCA do not recommend prepayment, in general. There are some pros and cons to consider. Preplanning combined with prepaying through a preneed contract can offer the customer more control and peace of mind than simply preplanning. Ideally, the customer learns about all their options for goods and services and can inspect the merchandise and facilities. Prepaying may lift a burden from loved ones by ensuring that a professional is lined up to handle what needs to be done right after a death, such as transporting and storing the body and obtaining needed certificates. In contrast, when a person does not preplan or prepay, their family must make important and costly decisions quickly, and they may be affected by intense emotions, including shock, grief, confusion, and/or anger. Knowing what funeral home or services to use, if any, can be beneficial. Grieving loved ones may be unfamiliar with the process or the role of the funeral director and may feel uncomfortable asking questions. They may be vulnerable to pressure from unscrupulous funeral homes to buy more expensive goods or services, for example, spending money “to show how much you care.” Loved ones may struggle with not knowing how someone wanted to be commemorated. These decisions can create or exacerbate family conflicts. There are no guarantees with preneed contracts and a number of issues may arise. The AARP has compiled an analysis of state laws that govern preneed contracts to educate the consumer (Erskin, 2015): ● No federal regulation specifically addresses preneed contracts, and state-level regulation is inconsistent. ● Every state except Alabama regulates preneed contracts, but state laws vary greatly in scope, approach, and requirements. ● Twenty-four states regulate both funeral and burial contracts in a single statute; 17 states have 2 separate preneed funeral and burial laws; and the remaining 8 states have a single statute that covers only preneed funeral contracts. ● In many states, only licensed funeral home directors, cemeterians, or their employees or agents are allowed to sell preneed contracts. In other states, third-party sellers, that is, persons who are neither funeral directors nor cemeterians, can sell preneed products as long as they obtain a license or permit from the state. ● Laws governing funding options and issues (e.g., trust funds), insurance policies, contract provisions, itemization of goods and services, portability restrictions, handling of escrowed funds, refund and redress mechanisms (i.e., a state consumer
protection fund), the Unfair and Deceptive Acts and Practices (UDAP) law, and private right of action vary from state to state. ● There is generally a significant length of time between the signing of the preneed agreement and the need for the goods and services described in the agreement, and mishandled funds may be undetected for years. ● It is often difficult to determine if specific provisions of the contract were fulfilled (e.g., the type of casket), since the person who signed the contract is likely deceased. Survivors rarely have knowledge of specific provisions, and they may unknowingly be charged for products and services included in the initial agreement, for services not requested by the deceased, or for more expensive goods or services. ● Preneed agreements are becoming increasingly complex, with more decisions and more potential for fraudulent activity. Preneed agreements likely include a package of both funeral and burial goods and services from funeral directors and/or cemeterians that may overlap or result in duplicate payments. ● More third-party sellers are offering preneed agreements. Adequate oversight of these agreements is often hampered by state regulators’ lack of authority and resources and a lack of understanding by the consumer of their rights and procedures for redress. The Funeral Consumer Alliance (FCA) cautions consumers against prepayment through preneed contracts. They offer the following information to consumers: Insurance companies and funeral homes often tout the benefits of the pre-paid plans they sell. They urge customers to pay for their funeral in advance, in order to spare their survivors the trouble and expense, lock in current prices, or shelter their assets from Medicaid. The truth is that it is usually unwise to pay ahead. No matter how attractive the business makes it sound, there are serious drawbacks to pre-paying that the seller may not disclose. The children and survivors of those who have prepaid often misunderstand the contracts, are unaware of them, or find themselves surprised by additional fees. In addition, many states have inadequate laws protecting funds in preneed plans, and money invested could be at risk. Unless Medicaid requires you to “spend down” your money to qualify for benefits, you’re better off planning ahead without paying ahead. (Funeral Consumers Alliance, n.d.) The FCA identifies the following risks of prepaying: ● If the purchaser decides to cancel, move, or change the plan, they may not receive a full refund. ● In many states, every year the seller may withdraw part or all of the interest earned on the account. ● The cash-out value on an insurance policy can be less than what was originally paid. ● The money paid for funeral arrangements is not available for emergencies if needed.
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