Pre-payment options and types of contracts

When pre-payment of funeral services are received by a funeral home in Michigan, the funeral home has 30 days to turn the money over to a third party investor. This could be in a pre-paid funeral insurance policy or a trust with a bank. This protects you, the consumer.

Pre-Paid Funeral Insurance Policy

 • Unlike traditional life insurance, these policies are written by funeral home representatives who have a limited insurance license.

• These policies can be made irrevocable to protect your funeral funds if you ever had to apply for Medicaid. Traditional whole life insurance policies can not.

• If you ever decided to change funeral homes, 100 percent of the funds transfer to the new funeral home.

Trust Account

• Money is set aside into a trust

• There are many different types of trusts with different interest rates.

• It is also important to note, some funeral homes invest in a trust product that requires the purchaser to pay taxes on the interest earned a the end of the year. At Deisler Funeral Home, we never want our families to receive a 1099. Therefore, the taxes are paid out of the trust itself.

• Under guidelines set up in the State of Michigan, if you ever decided to change funeral homes, the funeral home that wrote the original contract can keep up to 10 percent of the money invested. That does not mean every funeral home will keep the 10 percent, but legally they reserve the right to do so.

Guaranteed Contract

 • The funeral home uses the interest earned to offset rising costs.

• If there is not enough money in the account to cover costs for the things listed in the guaranteed contract, the funeral home must provide you with those items (or items of equal value) at no additional cost.

Non-Guaranteed Contract

 • Again, the funeral home uses the interest earned to offset any rise in costs.

• However, the difference is if the account does not accrue enough interest, the family is responsible for the difference in costs.