How to Protect Yourself from Funeral Insurance Scams
PrintDescription: The experience of planning the funeral for a deceased loved one is often the catalyst for planning your own funeral. There is no time when a family is more vulnerable. It often brings out predatory behavior in the form of funeral insurance scams.
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There is no time when a family is more vulnerable than at the death of a loved one. Whether expected or a surprise, the end is so unnerving that even simple decisions can seem like monumental challenges.
Even though death is inevitable, few of us ever feel comfortable with the thought of planning a funeral. Therefore, at our time of need, we turn to the professionals for guidance from the planning stage through to the burial. Pain and bewilderment can be so overwhelming that often few questions are ever asked during the funeral planning process.
The experience of planning a funeral for a deceased loved one is often the catalyst for planning your own funeral. Having all the details arranged in advance saves the surviving family members from having to worry about planning the funeral. However, the idea of funeral insurance and pre-planning can still seem intimidating. Unfortunately, people are sometimes too trusting where death and funerals are concerned, no matter whose funeral is in question.
These feelings of intimidation and the uncertainty of the funeral-planning process have been known to bring out predatory behavior in a small minority of the funeral industry. Most practitioners of the profession are highly respectable business operators who treat every event with respect and dignity, but there are a few unscrupulous individuals in any business.
While you have time to do some clear-headed shopping around, look for hints of scams or potential problems before committing to any funeral insurance policy. The scammers are betting you will be long gone before foul play is suspected, and sadly that is a bet they usually win.
These scams are just a few to be aware of, but are by no means the only ones around.
Scam 1: The Funeral Home, Not Your Family, Is Beneficiary
Think of any insurance policy, and the thought of a beneficiary comes to mind. The thought of a beneficiary is usually followed by thoughts of beloved family and friends, but they are not always the beneficiaries of funeral insurance policies.
Many funeral directors make themselves or their businesses the beneficiaries of policies. This means no money goes to the family if there is any left over after funeral expenses have been met. Worse still, many funeral directors earn commissions for selling the very policies that name them as beneficiary.
Scam 2: Casket of Your Choice Is Not Really Your Choice
One advantage of buying funeral insurance for yourself is that you get to choose the style and value of the casket in which you expect to spend all of eternity. You do not choose when you die nor can you guarantee the design or value of the funeral home's casket inventory when you do eventually expire.
When the time comes, a funeral director may place you in a luxurious coffin for public view, but switch to a cheaper model once family members are out of sight.
Inflation might not be a friend, either. Today's $5000 casket may sell for a much higher price once the actual need arises. Family members may be forced to pay extra money at the time of the funeral, even though terms of the insurance policy were understood to allow for inflation.
Scam 3: No Option for Cancellation
The value of a funeral insurance policy is based on a monetary amount. If the policy is issued long before the funeral is conducted, monthly premiums may surpass the policy value. For example, pay $50 per month on funeral insurance valued at $6000 and the full value amount will be met after 10 years of payment, while the insured individual is in good health with a long future projected. Further payments may seem excessive and the policyholder may want to cancel the policy.
This may not always be possible, depending on the terms of the contract. The money may be returned to the policyholder - but as a loan, not a settlement, in which case the policyholder ends up paying interest to someone else on a loan of his own money. Alternatively, it may be paid to the funeral home, not the policyholder. It may be a contract that cannot be cancelled at all or not without significant financial penalties.
The very best way to protect yourself from funeral insurance scams is to buy from a reliable, reputable insurance provider - one who freely and thoroughly answers all your questions without aggressive sales pressure. Shop around before making a decision and rely on instinct. If you do not feel comfortable with a provider, there is probably good reason so steer clear.
About the Author:
George Pettit is a journalist and financial specialist from Australia. He writes for several magazines about topics such as real estate, investments, funeral insurance, currency trading, and other topics that attract the attention of many readers. Article Source: Eulogy Site - http://EulogySite.com