Breaking News-March 15- The Chicago Tribune gave some new affirmations to the death and dying of preneed or prepaid funerals. As the death of preneed continues the average cost of a funeral will go down.
In a post on March 10( “IFDA SPEAKER says Preneed is terminal,it will die.“) I stated that preneed will die or be dead by January1st 2010.
The Tribune Article came up with statements by funeral directors and several experts who stated preneed was no longer profitable for the funeral director.
‘David Nixon, an Illinois financial consultant to funeral homes…..The (IFDA) debacle has given Nixon more reason to advise Illinois funeral directors to stop selling guaranteed funeral contracts. “It really doesn’t make sense in the long run to guarantee things that are beyond your control,” he said.’
“In Rockland, Mass., Robert Biggins stopped offering guaranteed contracts six months ago at his funeral home. Some funeral costs increase by more than 5 percent a year, but banks are not paying that much for deposits, said Biggins, past president of the National Funeral Directors Association.“
Also quoted was Bonnie McCullough, executive director of the New York State Funeral Directors Association. She said ” We’re in unprecedented times right now,” she said. “Can you guarantee what something is going to cost 15 years from now?”
The main reason over the years that Funeral Directors collected and hung on to large numbers of preneed policies was they received the interest on the folks money. Large Funeral Homes and funeral groups, corporate funeral homes, in actuality during many years received more money in preneed commissions than they did from doing funerals each year! Just like Wall Street it all came down to greed.
The evidence for this also comes from the two big Funeral Corporations, Service Corporation and Stewart Enterprises who showed extensive losses in their cemetery preneed in there last financial reports.
This was a bubble for funeral directors and it gave funeral home owners lots of dollars. Like all bubbles this one has burst.
Traditional Preneed in effect was decapitated in 2008 by the economic down turn, the NPS and the IFDA scandals. In spite of efforts to reattach the head, it cannot be done.
Your Funeral Guy thanks the Chicago Tribune for the affirmations on the Death and dying of preneed, or prepaid funerals.
Funeral Industry| Funeral Cost blog by Your Funeral Guy, R.Brian Burkhardt
Sources :The Chicago Tribune Article here and the research and funeral experience of your funeral guy.
Decapitation picture from flicker creative commons license from Old Scool’s Photo stream