Final Expense Life Insurance V. Prepaying At Funeral Home

[NSRH]

https://www.google.com/amp/www.stlt...5a1b7d82-1238-5432-b49d-a4ff94ca466e.amp.html

When this story broke in St. Louis, many of our telesales agents wrote a number of F2F apps because of all the local attention it was given.

Does anyone know if money prepaid to a funeral home has any reinsurance protection, much like a traditional life policy would have?

 

[dtownboy]

https://www.google.com/amp/www.stlt...5a1b7d82-1238-5432-b49d-a4ff94ca466e.amp.html

When this story broke in St. Louis, many of our telesales agents wrote a number of F2F apps because of all the local attention it was given.

Does anyone know if money prepaid to a funeral home has any reinsurance protection, much like a traditional life policy would have?

Most "pre-paid" funerals go through a pre-need insurance policy held by an insurance company. It's just a different type of life insurance.

 

[jdeasy]

https://www.google.com/amp/www.stlt...5a1b7d82-1238-5432-b49d-a4ff94ca466e.amp.html

When this story broke in St. Louis, many of our telesales agents wrote a number of F2F apps because of all the local attention it was given.

Does anyone know if money prepaid to a funeral home has any reinsurance protection, much like a traditional life policy would have?

Do you not know what preneed insurance is?

 

[NSRH]

I guess the better question is if there is a difference between preneed and pre paying. In other words, can a funeral home legally take someone's prepayment and NOT put them into a pre need policy? I suspect this might happen with some independent funeral homes in inner cities.

Either way, what's the benefit of a preneed policy, other than Medicaid planning, when compared to an FE or SPWL policy?

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Most "pre-paid" funerals go through a pre-need insurance policy held by an insurance company. It's just a different type of life insurance.

You say "most" go through insurance policies. What about the rest?

 

[Newby]

https://www.google.com/amp/www.stlt...5a1b7d82-1238-5432-b49d-a4ff94ca466e.amp.html

When this story broke in St. Louis, many of our telesales agents wrote a number of F2F apps because of all the local attention it was given.

Does anyone know if money prepaid to a funeral home has any reinsurance protection, much like a traditional life policy would have?

Yes that was the big one. Those guys ripped off the funeral homes themselves more than the public. Any funeral director that fell for it was NOT doing ANY due dilligence at all. It was very obvious that it was a scam to anyone with a lick of sense. The fact that they used "basically hookers" as company reps shouldn't raise any red flags should it?

Yes real preneed funds are life insurance. It's no different than any other life insurance. Sometimes it's put in bank trusts. It has the same protection as any other bank trust.

In PFC's case the money was embezzeled in a big scam. They created their own bogus life insurance company. It wasn't real. But much of the principle deposits were recovered. The funeral homes that bought into the scam will eat all the interest they would have worked with.

There is an American Greed episode all about that.

 

[jdeasy]

Even in that case the families were protected by the state guaranty fund.

Funeral homes lost money on the inflation. But the families did not.

 

[NSRH]

Even in that case the families were protected by the state guaranty fund.

I don't believe you are protected by state guarantee if money is not placed in an insurance policy or a trust.

 

[jdeasy]

I don't believe you are protected by state guarantee if money is not placed in an insurance policy or a trust.

That's correct. But that money was placed with an insurance company.

The company was part of the scam but that doesn't change the protection under the guaranty fund.

Did you not watch the show. They said the guaranty fund covered the families.

The guaranty fund only covered the original face amount. The inflation was guaranteed by the funeral homes and they had to honor that.

That's who lost the money. The funeral homes.

 

[NSRH]

"NPS promised customers across the country that money from prearranged funeral contracts would be held in trust. Claims were supposed to be funded by life insurance policies payable to the trust. But federal authorities found that company officers and others spent some of the money on lavish lifestyles instead."

I can't say for certain, but because of the quote above, I suspect some of the money that was embezzled didn't pass through the trust, so maybe some affected didn't have the protection. Who knows.

But back to my original question, is a preneed policy ever better than a SPWL or traditional FE?

 

[jdeasy]

"NPS promised customers across the country that money from prearranged funeral contracts would be held in trust. Claims were supposed to be funded by life insurance policies payable to the trust. But federal authorities found that company officers and others spent some of the money on lavish lifestyles instead."

I can't say for certain, but because of the quote above, I suspect some of the money that was embezzled didn't pass through the trust, so maybe some affected didn't have the protection. Who knows.

But back to my original question, is a preneed policy ever better than a SPWL or traditional FE?

It's not better or worse. It's the same thing.

As for embelzement, they did embelzle from the insurance company.

I don't know where you keep getting hung up on a trust.

Do you really not understand your competition?