Sunday, January 22, 2012

I THOUGHT I WOULD GET SOMETHING BACK FROM THAT $10,000 INSURANCE POLICY

I had the unfortunate opportunity to speak with a family this past week who was provided services from a locally owned and operated funeral home in the area. They were inquiring about service prices for pre-arrangements. Most people tend to do this after a family members passing. Maybe out of desperation, maybe guilt but most time out of felt necessity.

The individual I spoke with said that their is no way that the services we provide could be equal to those that they had just obtained at this other facility, I asked why they thought this? they said because the difference in price was $5,000 more at the other location than mine.

I asked how they paid and about how much did they pay for these services, they said that they used a $10,000 LIFE INSURANCE insurance policy. I also asked, prior to making arrangements, did you tell this other facility that you would be using a policy of $10,000 value, they said "YES"!

This was a very, very big mistake!

UNDERSTAND WHAT THESE THREE THINGS ARE!

LIFE INSURANCE = It is used to pay out to the family or beneficiary when one dies, if it is kept up to date. The "beneficiary" is who was chosen by the deceased for the policy to pay out to. This insurance will pay out a cash   amount when a person dies, you can use part of it if you like to cover funeral expenses, but YOU DO NOT have to use all of it. REMEMBER THAT! Life insurance takes sometimes about 30 plus days to pay out to the family or beneficiary. Life insurance is assignable should you choose to use it for funeral arrangements and the death is not contestable (questioned as to the manner of death by the insurance company).

PRE-NEED FUNERAL INSURANCE = It is used to pay for a funeral at any Funeral Home in the deceased name, usually written for a specific amount and can cover the expenses of a pre-selected funeral arrangement , nothing more. Pre-need insurance is not assignable, or it should not be, if the funeral home is telling you there is a fee, they are ripping you off. Pre-need funeral insurance pays out to the funeral home at their leisure. IF YOU CHOOSE TO USE A POLICY AT A MORE AFFORDABLE LOCATION OTHER THAN THE LOCATION IT WAS WRITTEN AT, YOU WILL GET MORE FOR THE POLICY THAN YOU WILL AT THE LOCATION IT WAS WRITTEN AT, MAYBE EVEN SOME REFUNDED.

Life Insurance POLICY ASSIGNMENT = The insurance "Assignment" is nothing more than the process and  "fee" charged by the funeral home to get another company to pay out the charges up front from the policy to the funeral home. This company will verify the policy is good, you will sign a few papers, notarized to ensure this is you and the assignment company will pay the funeral service. When the policy pays out in 30 or so days, the insurance company will pay out the funds to the assignment company that paid the funeral home. You will get what is left, if there is anything left. That is an assignment. A funeral homes assignment fee is nothing more than their fees to do the paperwork. The rate has snuck up to 20% at some funeral homes. That is $1,700 on a $8,500 funeral. That's crazy just to notarize a document and FAX it. That's just greed.

For more information on how you can pay for a funeral, click on the following link and read: "How are we going to pay for this funeral"

RULE NUMBER ONE -

Do you know what to say behind these doors?
NEVER, EVER tell a funeral home that you will be paying for a funeral with an insurance policy of any amount until AFTER you have made all the arrangements. MOST funeral homes are looking out for your best interests, some are not. A life insurance policy that is taken out as a life insurance policy, not a pre-need funeral insurance policy, is suppose to be used to handle more than just the burial expenses. That policy is designed to help the family carry over through the difficult time, not used as the funeral home needs to rack up a bill telling you all along "well, this is what Mom or Dad got the policy for you know".  That's just not true, and it's not right. Yes some funeral home do this, but it is morally and ethically wrong for a funeral home to do this. You will find that upon the death of a loved one monetary expenses will come up and most will find themselves in a position without the funds to handle these expenses after the funeral is over.

REMEMBER! The more affordable the funeral service you pick, the more your family will get back in dollar amount from the insurance company. This is YOUR CASH in your pocket.

I take great pride when I sit with a family and feel very good to be able to tell them that they will be getting over $6,600 back to assist them during this time. Families just cant believe that. It puts a little smile on their face during a difficult time.

Remember, a life insurance policy is not meant to be spent completely on a funeral, I bet that if you gave a unscrupulous funeral home a $25,000 policy, they would find a way to spend $24,500 of it on themselves.

Turning over a life insurance policy to a funeral home is like writing a blank check or giving them the amount of the policy in cash wrapped up in a big red bow. You are vulnerable and all they HOPE you know and care about is that the policy will be worth enough and even more to pay for their services, they WILL find a way to use up that whole policy, Every last bit!

Question these items if they show up on your contract:

  • A very large assignment fee (more than 10%)
  • Cemetery fees that YOU can pay for (Never pay through a funeral home unless you must)
  • More flowers than usual
  • The funeral homes referred minister
  • A nicer , much more expensive casket (Be weary of up selling)
  • Funeral clothing, suits, dresses
  • Deceased haircuts, shaves, hairstyles, nails, mustache trim, beard trim
  • Cremation Jewelry
  • Cremation casket (consider the rental casket always)
  • Limousines, more than one
  • A Reception (the funeral home will get a cut if recommended or included)
  • More staff for a visitation (will their be a large crowd? we will need to bring in more staff then)
  • More than one visitation
  • Overtime fees
  • Luxury register books
  • Luxury Memorial Folders
  • Trinkets, picture mugs, Such as encouraged Family Heirlooms
  • Memorial ribbons
  • Any type of paid grief counseling
  • any type of additional administration fees
  • FAXing fees
  • Phone call fees
  • Notary fees
  • Utility vehicle for doctors office work
  • Mileage fees
  • Home visit fees
  • Itemized charges for letters/correspondence
  • Specialized storage fees
  • Refrigeration if the body is embalmed
  • Questionable junk that has nothing to do with the services provided at all
As you can see, the list goes on and on.  Rest assure, on an $8,500 funeral, you can bet the funeral home is probably gonna profit about 3/4 of that amount.

Once again, REMEMBER! The more affordable the funeral service you pick, the more your family will get back in dollar amount from the insurance company. This is YOUR CASH in your pocket left to you, not the funeral home.

RULE NUMBER TWO -

Know what you want! Would you not rather take some of that life insurance policy home with you? Could you not use that extra $6,500 left over from that policy if you play your cards right, stand your ground and don't get talked into all those bells and whistles.

REMEMBER!

A life insurance policy and a Pre-Need insurance policy ARE NOT the same thing. The average funeral home that gets rich off of you wants you to think that you MUST spend ALL of a life insurance policy at their facility. They are hoping you don't know any better. They are counting on your grief and you not knowing the industry. Funeral homes fear you being educated in this industry.

RULE NUMBER THREE -

BE IN CONTROL! Insurance assignment fees are negotiable, the standard fee's are 5%. If the counselor refuses to budge, tell him or her you will move on. Let me ask you this, if there was no insurance policy, would they refuse your business for the profited amount on the same service? No, they would not.

The assignment percentage charged is for the whole price you pay for services, so if you include cemetery charges on the same contract, that could amount in the hundreds of dollars more, BE WEARY OF THE COUNSELOR TELLING YOU THAT THEY CAN GET YOU A LITTLE "SPENDING CASH" OUT OF THE POLICY SO YOU DON'T HAVE TO WAIT THE 30 OR SO DAYS FOR THE POLICY TO CASH OUT! you will be paying 10% to 20% or more on the dollar.

Again, NEVER, EVER tell the funeral home the worth of the policy until it is time to pay. If you do, you minus well be burning your money.

Use the policy for what the deceased wanted it for, to take care of you for a little bit after they have gone, not to line the coffers of a funeral home.

AND REMEMBER! The more affordable the funeral service you pick, the more your family will get back in dollar amount from the insurance company. This is YOUR CASH in your pocket. It comes back to you! It is yours to spend on other things you may need, not some funeral homes high overhead or sports car payment.

Good Luck!

Miguel

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