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Pre-Need Funeral Arrangements
Pre-need funeral arrangements may be financed through two companies I presently represent as a Pennsylvania licensed life insurance agent. Forethought Life and the Loyal Christian Benefit Association. Both firms are approved by the state of Pennsylvania Insurance Department.
Some persons, due to age, physical condition, or personal preference may prefer to have their funds placed in a burial trust account with a local bank. In this instance a notice of the interest accrued on the account each year will be mailed to the person for whom the trust was set up. The interest must then be reported as interest income to the Internal Revenue Service and may be subject to tax.
With insurance plans the interest accrues to the account without the necessity of reporting it to the IRS or paying taxes on the interest.
Questions I am often asked about pre-need monies paid to me:
Does the funeral home keep the money I pay to them? At no time are any monies given to us retained by the funeral home. 100% of all monies are placed in trust for the funeral services of the purchasing party either through an insurance company or bank.
What happens if you are no longer in business when I die? Should we go out of business your funds are safely invested and will be paid to whichever funeral home provides the funeral services you have contracted for.
Will this other funeral home provide the services you’ve agreed to provide? A funeral home other than the Jerome W. Shell Funeral Home is not required to provide the same services for the same price, but in most cases will. The majority of family owned funeral homes are pleased to have the opportunity to serve a new family and know there is a profit to be made even if it may be smaller than they are accustomed to earning. If you choose to go to a corporate owned funeral facility it would be wise to ask them prior to signing any contract if they will honor your present contract and provide the same services and merchandise at no additional cost to you. At the very least, all monies given to our firm plus the interest accrued will be returned to you or the funeral firm you transfer to.
Do you keep any of the monies we pay to you as a service charge or handling fee? No. All funds provided to us, plus interest accrued, will be returned to the family in the form of the requested services being satisfactorily supplied or by transfer to another funeral home should we no longer be in business.
What if the money we pay to your firm and the interest it accrues does not cover the cost of my funeral in five or ten years due to inflation? We will provide the services we have promised for the funds available in your burial account and nothing more will be charged to your family.
What if the money in my account is greater than the cost of my funeral services when I die? Upon your death we provide the services we agreed to provide and deduct the cost from your burial plan. If there are excess monies in the account they will be returned to your estate or next-of-kin.
Can my family make changes to my burial plans? If you approve the changes, yes. If the burial plans are irrevocable, no.
What does irrevocable mean? Basically it means NO ONE can touch your money until you die and then only the funeral home that provides your funeral services. This designation assures that your funeral funds are available even if you are placed in a nursing facility and all of your other monies have been completely depleted to pay for your care. When we place your pre-need monies with one of our insurance companies we DO NOT make the plan irrevocable until you tell us to. This means that at some future date, in an emergency, if you were forced by your financial situation to withdraw funds from your pre-paid burial insurance account you could do so. However, at that point in time we would no longer be required to provide the services you originally requested until arrangements had been made to pay for them in full.
I will be happy to answer any other questions you or your family may have.