Thoughtful Responses to the Most Commonly Asked Questions About Pre-planning and Pre-funding a Funeral.
Q. Are Pre-planned funeral arrangements guaranteed?
A. When you pre-plan, and pre-pay, your funeral arrangements, we guarantee that we will provide our services, and the merchandise you select, at the time of need. You pay today's prices. The funds are invested, in accordance with Alabama law, in a Pre-need Funeral Policy. These policies are designed to grow in value, so the proceeds will cover the cost of the selected funeral arrangements when death occurs.
Q. What Exactly is a Pre-need Funeral Policy?
A. A pre-need funeral policy is an insurance policy whose benefits are assigned to cover the cost of a pre-arranged funeral contract. A funeral contract typically includes professional services, funeral merchandise, funeral services and even cemetery services and merchandise. The purpose of pre-need funeral insurance is to set aside funds before the need arises, thereby protecting your loved ones and your financial assets by "locking in" on today's costs.
Q. What's the Difference Between a Standard Life Insurance Policy and Pre-need Funeral Insurance; Aren't They Basically the Same Thing?
A. Traditional life insurance is intended to provide for a broad range of your survivors' future financial needs provide income, cover education costs, pay off a mortgage, and the like. Pre-need funeral insurance, on the other hand, is specifically intended to cover only the predetermined costs of a pre-arranged funeral contract.
Q: What are the differences in coverage?
A. There are several other important differences between the two types of coverage. For example:
With regard to benefit distribution at the time of death, pre-need funeral insurance is payable immediately to the beneficiary (generally the funeral home) upon the policyholder's death; traditional life insurance policy benefit distributions may require several weeks to be paid by the insurance company.
Q. Do I Actually Need Pre-need Funeral Insurance; Can't I Simply Use Some Other Source of Funding?
A. Pre-need funeral insurance is a choice, not a requirement. Alabama law also allows preneed funeral arrangements to be financed with bank trusts. However, trusts, unlike funeral insurance, may be liable for federal and state taxes. Our plan also has the following benefits:
Pre-need funeral policies are tied directly to the costs of a pre-arranged funeral. All of the services and merchandise that you select will be completely covered by your insurance if your funeral home have guaranteed the price of your funeral.
Second, there is no tax liability on the death benefit to your surviving family members.
Third, the benefit of your pre-need funeral insurance is payable immediately to the funeral home at the time of your death.
Fourth, there is little or no underwriting required to apply for a preneed policy. Our funeral directors, not anonymous underwriters, make the decision.
Q. How Much Does Pre-need Funeral Insurance Cost?
A. Your cost depends on the cost of the services and goods you select for your funeral during the preplanning process. In other words, you control the costs based on what you choose.
As it relates to your insurance payments, you can make a single premium payment and be done with it, or you can spread your payments out over several years. Again, the choice and the control are all yours.
Q. What if I move?
A. Alabama law requires that all pre-need funeral plans be "portable." That means, if you move, you may transfer your policy to virtually any funeral home in the United States.
Q. Can't I just specify my arrangements in my will and let my estate take care of the expense?
A. Wills are not probated until well after death, and usually not until after the funeral services. Additionally, someone will have to qualify as executor or administrator, which may delay further any actions specified in the will from being carried out. If your wishes differ from those of your family or heirs, stating your wishes clearly in a Preneed Funeral Policy may be the best way to ensure they are carried out.