Hello all, I represent a funeral home as a pre-need specialist. We do not work with Fortis, but unfortunately the narative above sure does paint an ugly picture of the industry as a whole. One that I do not find to be accurate at all in my experience with our underwriter, our funeral home, and our clients. Since 2005, there are conditions that do make a refund of the policy monies not possible, but they are a tradeoff that in other ways protects the consumer. Most notibly in Michigan, if a person is applying for Medicaid, then the monies used to fund their funeral are a recognized expenditure as part of what is known as a ‘Medicaid Spenddown’. However these arrangements MUST be placed into an Irrevocable Funeral trust or policy. Meaning no amount of the monies can be refunded – especially if the arrangements are changed to something of lesser service value than originally set up. Why? Because the State wants to ensure that the consumer applying for Medicaid assistance does not have access to other funds (like cashing in a funeral policy), so they require that no money can be refunded to the client. The benefit to the consumer is that their funeral is paid for with existing funds, which the State does not count against them as an asset when calculating eligibility for Medicaid. A win-win. The client can ALWAYS transfer the policy to any other funeral home. Some contracts state that the original Funeral Home contract provider can hold back up to 9.091% for administrative fees, but not all funeral homes will state this nor enforce it. The client can also cancel, or make changes to the arrangements anytime prior to the funeral home providing some level of service of the contract (typically when the body is collected). The other item with which I take issue was the statment: “If you plan a $5,000 funeral, you will be expected to pay the full $5,000 for the funeral insurance, whether you pay it all at once or make time payments or whether your survivors end up paying the rest after your death. ” That is simply NOT true. The whole idea of the protection afforded by a policy is that the service and merchandise parts provided by the funeral home are guaranteed. The current price is locked in, and if the client dies prior to full payment, the guranteed items are paid for in full by the policy. THE ONLY part of arrangements that the family may have to pay additional on is any increase in costs in the ‘cash advance’ items area – which is money paid to third parties such as the county for Death Certificates, or actual obituary costs, or cemetery costs that may have risen above the estimated costs (if any funds were collected in advance). Also, the only reason a clients arrangements would not be funded in full – especially when they die prior to full payment, is if they have a severe illness noted at time of application. And only this action places them under a partial payout condition. Which means for a period of either 1 or 2 years (known as graded benefit) if they died, the payments would stop, but they would only recieve 25% if death occurs within 1 year, or 50% if death occurs in second year. After this period has passed, it is 100% coverage payout no matter when they pass, and no payments continue by the family. They other good news is that the payments DO STOP at the end of the term (3,5,10, or 20 year terms). unlike term life insurance where a person would pay until death – many times paying far more than the death benfit they recieve, plus this does not lock in rising costs of funeral arrangements, plus it is many times looked at as an asset and must be surrendered and cashed out in order to apply for Medicaid as mentioned earlier. This article casts a poor light on our industry and a tool that many times pays out for services and merchandise far more than the family has paid in – just like house insurance or car insurance. I think it is a shame what Ms. Anna Jones endured, but to me, her experience is a reflection on a few non-responsive people at both the funeral home and at Fortis. It is unfortunate, but certainly NOT the norm. I commend you for looking out for the consumer in the funeral business, but would we not all be better served if your information were balanced and accurate? I am proud to be providing execellent service and products to my families in Michigan, David Potts Precoa – Preneed sales Serving: O’Guinn Family Funeral Homes Clio, Birch Run, Montrose, Michigan.
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