Pre Need/Final Expense 101

What's everyones opinion of the Funeral Trusts that can move money into a trust for a funeral to any funeral home up to $15,000, and this money will bypass Medicaid spend down? I am contracting with a company called Unity for this. Seems a viable product in certain situations. Opinions please???
 
What's everyones opinion of the Funeral Trusts that can move money into a trust for a funeral to any funeral home up to $15,000, and this money will bypass Medicaid spend down? I am contracting with a company called Unity for this. Seems a viable product in certain situations. Opinions please???

They are just a watered down Preneed. They are the same policy that the funeral homes sell BUT usually designed with less policy growth (so the FMO can make more commission). This comes at great penalty to the consumer since there is no price guarantee if the consumer buys the Unity or NGL policy away from the funeral home. If he buys the same policy through a funeral home he gets a full price guarantee in most states.
Some of the marketers for these funeral trust policies train agents with wrong information. They train them to sell multiple policies on various family members when one is on a Medicaid spend down. Many states will require that money to be recovered and will go after these families aggressively but the marketers aren't telling the agents this.
They also tell the agents that when people buy their funeral trust at the funeral home that it is not transferable if they decide to use a different funeral home. This is of course wrong. It's the exact same product either way. They just get much better guarantees and payment terms if they buy it through the funeral home. They also get professional planning which is one of the main reasons for doing it in advance.
 
newby, does columbian have a competitive product in the pre-needs market

Yes. I have never used them but they seem to be OK. Most Preneed companies are very similar in the product. The differences come with how they figure early payoffs.
 
So if FE tends to service the 50 to 80 year old folks with an incomes of 15K to 50K, what age and income brackets are typically looking to purchase the Pre-need packages? Also, is the Pre-need market as lucrative as the FE market?
 
So if FE tends to service the 50 to 80 year old folks with an incomes of 15K to 50K, what age and income brackets are typically looking to purchase the Pre-need packages? Also, is the Pre-need market as lucrative as the FE market?

Preneed appeals to ages 50 to 100+ and usually they would be $70,000 to very wealthy.

It pays different than FE. It's based on age and face amount not annual premium. There are no renewals at all. But on ages 51 to 75 it pays about the same as if you got the 1st year and all 10 years of renewals all at once. From 75 to 85 it just pays OK. Above 85 you make very little. Ages 0 to 50 it pays just a little better than a great 1st year FE contract but no renewals.

Most people selling Preneed make between $50,000 to $80,000 per year but have zero lead cost. Some also get full benefits. Some of us are independent and make more but pay for everything ourselves.
 
Thanks Newby, it sounds it wouldn't be a bad deal if you have a steady flow of leads and folks to talk to. I spoke to a funeral home out here a while back but the commissions they were offering was not nearly as good as you stated. I think they only wanted to pay $500 a sale. Plus they were targeting people in their 40s and up. Also, a lot of it was meeting with the families in the evenings.
 
Hey Newbie,
Quick question on the preneed. If you have a higher end clientel, why not sell them a single premiun policy from Settlers? If you have a customer that has a CD they were saving to help with funeral expenses, why not use part of the CD for the single premiun and still have money left over for investments/emergency's.
In this case above, a 58 year old male would be a $11,875.50 single premium and would buy $25,000 in coverge (Settlers). I don't sell preneed but I think this is a pretty good approach.
Thanks
 
Hey Newbie,
Quick question on the preneed. If you have a higher end clientel, why not sell them a single premiun policy from Settlers? If you have a customer that has a CD they were saving to help with funeral expenses, why not use part of the CD for the single premiun and still have money left over for investments/emergency's.
In this case above, a 58 year old male would be a $11,875.50 single premium and would buy $25,000 in coverge (Settlers). I don't sell preneed but I think this is a pretty good approach.
Thanks

I sell a lot of Settlers single premium plans but not to families who want a price guaranteed Preneed. The Settlers single pay is superior in my opinion to the NGL or Unity type single pay funeral trusts since there is no price guarantee anyway.

But if they are looking for an actual prepaid funeral you have to sell a plan that the funeral home can actually guarantee the price. And that requires an increasing benefit throuout their lifetime. $25,000 may fall short if that 58 year old lives up in his 90s.

Also believe it or not the Medicaid caseworkers have fits with policies like that if they end up on Medicaid. They want the death benefit to be very close to the quoted funeral. When the policy is overfunded they go bonkers. Even when the amount the family paid is the same.
 
Newby, thanks for helping us to understand the pre need vs single premium issue. I was just thinking the past few days, that single premium is a good idea, but now you mention Medicaid.

I am in PA, and am also licensed in Florida. I have not worked Florida yet. From what I have seen, these 2 states handle pre need differently, as far as what the funeral homes are allowed to sell. Four people in PA have asked me recently if I sell single premium, so I need to learn this fast.

Question about Medicaid: What actually happens there, please, with the single premium if the death benefit is more than the funeral cost?

So many folks where I live do end up in a nursing home, under Medicaid.

Thank you for your time.
 
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