Non Specified Pre-Arrangement
- Wesley VanMeter
- Sep 15, 2015
- 2 min read
Perhaps you do not want to pick out a casket or you haven't made up your mind about cremation versus traditional earth burial or you just can't bring yourself to talk about a funeral for mom or dad yet, that's ok.
Sometimes it is chosen or necessary to do a pre-arranged funeral contract with a funeral home that has no guranteed services attached to it. This means nothing has been chosen and you simply are placing funds into and insurance or trust plan that will be used for funeral or cremation expenses at the time of death. You can always go back and change the non-specified contract to a guaranteed contract if you decide to go ahead and choose what funeral arrangements that you want.
Remember that a non-specified funeral contract does not "lock in" prices, however the principal and any interest or growth from the insurance or trust product that your funeral home has placed your funds into is yours and will be applied to the funeral home's total contract at the time of death at the then current prices. If the funds are lacking, your family or estate will be charged the difference. If there is an overage of funds once the at-need funeral is satisfied the access will be refunded to your designated beneficiary or estate.
Non-specified contracts are often used when a person is being placed into a nursing facility and are applying for medicaid help. In the state of Oklahoma the maximum amount allowed into an irrevocable pre-paid burial plan is $10,000.
If you decide to convert the non-specified contract to a guranteed funeral contract, you can do so and then your prices become locked in and the funeral home will benefit from any gain that the policy receives. The risk here for the funeral home is that if the policy doesn't keep up with inflation they will have a loss.
Always be sure and read through your contract completely and ask questions if you don't understand any portion of it. (Since these contracts are funded through insurance product, they are regulated by your states Insurance Commission). A non-specified funeral contract may be an option that will best fit your needs or wishes.
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