Insurance Agent Forum

[Winter]

Aside from pre-paid plans, are there funeral directors who are also insurance licensed and who are either outright selling final expense or doing referrals and splitting commissions.

I have no idea whether this is desireable or unethical or good practice or a conflict of interest or what. Completely innocent here as to what is common practice.

Comments please. Undoubtedly mileage varies from state to state.

Winter

[arnguy]

In the Commonwealth of Pennylvania, only insurance agents who also hold a funeral dirrectors license are permitted to sell pre-need. Inasmuch as the funeral director holds a valid insurance agent license for Life sales I cannot see any reason that person would be prohibited from selling final expense. Of course, pre-need sales require conformity to the Federal Trade Commission regulations as well as the state regulations regarding sales funerals while final expense does not require any discussion of the funeral sale. About 10 years ago the insurance law was changed to require the funeral directors license in addition to the insurance license after some scandal regarding an unscrupulous agency seeling pre-need. That gave the funeral directors lobby an opportunityto demand a change in the insurance law. I exxperienced this first-hand inasmuch I was pre-need when the change became effective.

[Newby]

Almost all funeral homes have one or more agents actively selling pre-need funeral insurance. It is similar to final expense insurance except it has an increasing death benefit and is a paid up policy in 3, 5, or 10-years. It's also guaranteed issue and can offer coverage quicker than regular FE.

Since Funeral Directors have to deal with the family when the death occurs, they would not usually want to be involved with regular final expense insurance because there is no inflation protection and the coverage is usually way short when the death occurs.

If you want to work with a funeral home's client base you will need to sell the actual pre-need insurance.

You do have to check your state laws to see if it is legal to sell it in your state without being a licensed Funeral Director.

[David C]

There was a company called United Family Life, if I'm not badly mistaken some agencies were actually located in funeral homes. There were later bought by Fortis.

A relative owns several funeral homes and he is a licensed agent.

[Newby]

Originally Posted by David C

There was a company called United Family Life, if I'm not badly mistaken some agencies were actually located in funeral homes. There were later bought by Fortis.

A relative owns several funeral homes and he is a licensed agent.

Yes, United Family Life was bought by Fortis which later became Assurant and was the 2nd largest preneed insurance seller after Forethought. They dropped out of Preneed in 2004 and sold that division off to Forethought.

Assurant is still in the preneed business but only through funeral homes owned by Service Corporation International with a company called American Memorial Life which is they still own.

[inreverse]

Minnesota allows insurance agents to sell pre-need , is the contracting different for Forethought for the pre-need products? Can an agent get contracted for both types of products through the IMO's?

[Newby]

Originally Posted by inreverse

Minnesota allows insurance agents to sell pre-need , is the contracting different for Forethought for the pre-need products? Can an agent get contracted for both types of products through the IMO's?

If you are contracted for Forethought through me you can sell Forelife, Encore and Select. Basically ALL of Forethought's product line. Many IMOs can only offer ForeLife.

BUT, even though you can sell the pre-need funding product, Forethought forbids it as being marketed or described as a pre-need plan UNLESS you have a written agreement with a funeral home. Pre-need is a contract with a funeral home not just an insurance policy.

You can however sell the Encore or Select insurance AS final expense. If you have people who want the increasing benefit and limited payment. You just won't be able to call it pre-need insurance.