The Chicago Tribune has done an article on preneed aggressively sold to a person on disability. This is truly another example about why one should not pre-purchase, prepay a funeral. This type of aggressive salesmanship is not needed or good for the Funeral Business.
The flier that arrived in Carol Rognstad’s mailbox sounded like a great deal. For only $38 a month, she could prepay for her future cremation.
The 48-year-old, who is mentally disabled, prides herself on doing things on her own. So she called the number listed and set up an appointment.
In mid-July, a representative from Warren Funeral Home visited her low-income apartment in Round Lake Beach. Rognstad signed a 60-month contract, in which she agreed to pay a total of $2,280.
But a few months later, Rognstad began having second thoughts. Because she relies solely on her monthly disability check, the $38 payment had a significant impact. Concerned she had done something wrong, Rognstad called her mother, Holly Anderle, and asked for help.
$2,280 USD is far too much to pay for a cremation.
Funeral industry| Funeral News| Funeral Blog by Your Funeral Guy
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Funerals .org has outlined a funeral complaint about preneed insurance. Incredibly insurance premiums total more than twice the cost of a funeral. The Funeral industry needs to stand up and take note of this complaint.
This presents us with a concrete example of the Dangers of funeral preneed. Your Funeral Guy has seen first hand the horrors of the preneed company mentioned below and has refused to work for this funeral preneed firm firm
Another example of the financial dangers of prepaid funerals. This Iowa couple was shocked to discover they’d have to pay almost $28,000 in insurance premiums for funerals that would cost only $14,000. Read their complaint-
After sending more than $11,000 to Homesteaders Insurance over the past four years, we recently decided to see what the exact balance due would be. The funeral home told us to call the insurance company. We were shocked to learn from Homesteaders that we hadbeen locked into a 10-year payment plan at the rate of $230.83 a month. At that rate, we would have to pay $27,699.60, about double of what the actual funerals would cost.
Funeral Industry|Funeral News|Funeral Funeral Blog by Your Funeral Guy
Who own’s funeral preneed? Is it the bank that own’s the trust fund? The insurance company? The Funeral corporation?The funeral director? The policy holder?The answer is not in plain sight. This makes repaying a funeral not a good idea.
Because the laws are different in each State, each may have a different answer. Because each contract is different clearly the Managers of the IFDA Trust(through IFDA services)thought the money was theirs when they robbed it. The funeral corporations list the money as theirs on the balance sheet(this is true for SCI, Big Death, Service Corporation International and other funeral corporations).
Funeral Directors count on the preneed money being there, for themselves and their funeral home.
NPS, National Prearranged Services saw the preneed insurance money in their contracts and they took it.(preneed insurance is different from life insurance)The consumer who purchases the preneed contract often walks away thinking the money is their own. Sadly that is never the case.
Funeral industry| Funeral Blog by Your Funeral Guy
The scandal ridden Illinois Funeral Directors Association is seeking another trustee for it’s IFDA Preneed Trust Fund. This is what the brought the Ponzi Scheme in to the light in the first place.
The Comptroller of the State of Illinois took away the license of the State of the Illinois Funeral Directors Association to Manage the trust fund because the leaders of the IFDA were raiding the Fund for there own purposes. In the Fall of 2007 there losses 40 million, in fall 2008 59 million and now nearly 100 million.
At there Convention in June this summer there was talk(VENDORS) that the Illinois Funeral Directors Association will not be around next year. There is also rumors circulating about Illinois that The Six Funeral homes Suing(lawsuits) the state IFDA are starting there own funeral directors association called The IFSA. I have not confirmed the rumor bit. That said going with the New Association maybe just just a jump from the frying pan into the fire. Some say the Funeral Home leading the charge against the IFDA is deficient in Ethics.
This much is true The IFDA is Seeking a new Trustee, a bad sign for their survival. From an E-Mail From the IFDA:
IFDA E-News Bulletin
Aug 26, 2009
IFDA Seeking New Trustee
“Merrill Lynch Trust Company is working with IFDA to appoint a new Successor Trustee. Conversations have been established with four financial institutions to review the possibility of taking over as a new trustee. IFDA Executive Director, Duane Marsh, cautions, “This is a very complex undertaking but a necessary one if we are to provide the fund with long-term stability.”
The IFDA is not saying why they are seeking a new trustee, and why Merrill Lynch is not continuing as trustee.
This has been the way the IFDA has operated throughout the Scandal.
Sadly the press has not reported on these events. It is past the time that someone should speak up.
Funeral Industry|Funeral blog by Your Funeral Guy
The worlds largest funeral corporation Service Corporation International(SCI) has partnered with yet another insurance company.
SCI’s numbers have been in almost a free fall for Fiscal 2009 and they have joined another Insurance Company at the hip to stop the decline. Insurance Companies have been hurting dramatically due to the recession and so have the Funeral Corporations. The latest Company SCI has partnered with is United Home Life Insurance. Previously the have partnered with SLAICO and MATRIX DIRECT.
“United Home Life Insurance Company and Service Corporation International (NYSE: SCI) announce the creation of a partnership to enhance the products currently offered by United Home Life for agents. Through the partnership, independent agents can utilize the Dignity Planning(TM) tool to increase their profitability by offering clients the ability to turn their policy into a complete end-of-life plan. Dignity Planning is unlike any other end-of-life planning tool in that it was designed for financial service professionals and provides agents with real-time needs analysis and pricing, as well as inflation and aged-based life expectancy costs of specific elements rather than generic national averages.
Be sure to keep control of your own life insurance policy and do not turn it over to Dignity Planning
Funeral Industry|Funeral Blog by Your Funeral Guy
Dignity Logo Pic on flickr under the creative commons license at
IFDA LAWSUIT NEWS.News-June 12,2009 There was an amended Six Funeral Director Complaint filed in The Circuit Court of Cook Today. Your Funeral Guy is not a lawyer. What is truly sad is that one simple Funeral Director has to declare the latest in an almost 100 Million Funeral Insurance Fraud in the State of Illinois.
The information and lawsuits are accessable easily several different ways on the internet. The Media is truly remiss in this situation in not naming names because many of the Folks named are likely to be named as “Criminals Soon”. Both the Illinois Funeral Directors Association and National Funeral Directors Association(NFDA) are remiss in not Reprimanding, Disciplining, Or Expelling the named folks.
100 Million Dollars and no disciplining! The Comptroller and other regulators have done closed door (in True State Government of Illinois,Chicago and Obama style)deals giving some a get out of jail free card far short of the 100 million involved. There are 19 charges in the amended derivative complaint
THE NAMES OF THE PEOPLE INVOLVED AS WELL AS THE CORPORATIONS ARE THERE!
Funeral Industry, Funeral blog by Your Funeral Guy, Funeral Director,Illinois, Virginia
Although I do not think that some six suing funeral directors are ethical in any sense of the word. I must say I have pretty much come over to their point of view with the facts that have been revealed to date.
Of Course, Funeral directors, Merrill Lynch, are all part of the Illinois Funeral Mess.
DEAD MEN DO NOT TELL LIES, Neither do dead funeral directors associations.
According to the Wall Street Journal several Life insurance Companies are now offering funeral industry related services. This was made apparent Monday when immediately after receiving a federal bailout the Hartford Insurance Company announced it was teaming up with EVEREST -a funeral concierge and planning service.
Snippet: from the May 19th Wall Street Journal Article:“Legal help for probate and professional help for funeral planning are among the services being bundled into group-coverage packages by a growing number of companies.Inc.; Inc.; ING Employee Benefits, a subsidiary of NV; and Inc. are among those joining the trend.”
There is a new emerging funeral industry as the traditional funeral business is buckling under economic pressures and life insurance companies are taking a role in funerals is just a small part of this. Many time times the life insurance company refers to this as end of life services.
Funeral Industry| Funeral Blog by Your Funeral Guy.
Details are at the Wall Street Journal online. The life insurance companies always have been closely associated with the funeral industry in that cashing in a life insurance policy is how many funerals are paid for. More information on the Hartford-Everest team up can be found here.
Wall Street Journal pic from flickr under the creative commons license from
“Depositions are in” in the Calvert Six Funeral Director Lawsuit against the IFDA. The matter of the lawsuit against the Illinois Funeral Directors “misuse” or theft of almost 60 Million Dollars will soon be before a Court of Law.
“Wexler Wallace filed Plaintiffs’ Derivative Complaint on January 28, 2009. Defendants’ continue to deny responsibility and their responses to the Derivative Complaint are due on April 29, 2009.
Wexler Wallace has issued numerous third-party subpoenas, including a subpoena to U.S. Senator Roland Burris (D-IL) seeking documents relating to the Senator’s issuance of IFDA’s trustee license when he was Comptroller and the Senator’s lobbying activities on behalf of IFDA after he became aware of the Preneed Trust’s deficit. Wexler Wallace has also issued subpoenas to the Illinois Office of the Comptroller and the Illinois Banking Division of the Department of Financial and Professional Regulation, which are the Illinois governmental agencies charged with overseeing the Preneed Trust. Wexler Wallace has also subpoenaed the accounting firms that audited the Preneed Trust and other entities that are believed to have information relevant to the lawsuit”
So what does this mean for the IFDA and the Regulators in the State of Illinois? It means that these government leaders who were responsible for Regulation of the IFDA preneed Trust will have to explain themselves and give up information.
Specifically: United States Senator from ” ILLINOIS” Senator Roland Burris
State of Illinois Comptroller Dan Hynes.
Officers of the Banking Division of the Illinois Department of Regulation.
Accounting firms and other entities that have audited the IFDA Preneed Trust.
It is my contention that both sides area at fault in this situation for failure to do Due Diligence. Check it out
Funeral Industry|Funeral Blog by Your Funeral Guy
Burris wih ex Governor Blagovitch pic from flickr under the creative commons license from
5/2/09-Today the Wall Street Journal referred Americans to the no funeral preneed people, the Funeral Consumers Alliance. This is a good thing. IF YOU WANT TO COME IN UNDER THE AVERAGE COST OF A FUNERAL- It is best not to do funeral preneed or prepay a funeral.
In the article today “Planning for your Funeral here is a guide to smart shopping” the WSJ quoted Joshua Slocum.
“Go to funerals.org and click on the tab that says “find a local FCA.” Clicking on “funeral self-help — answers to frequent questions” under the main menu, then scrolling down and clicking on “funeral arrangements,” will pull up a list of publications including “Four-Step Funeral Planning: Where to Start When You Don’t Know How to Start!”
One of the biggest decisions you will face is whether to pay in advance for arrangements you make. Joshua Slocum, the alliance’s executive director, cautions against advance payments. He says many people don’t understand the fine print in their contracts, consumers could lose earnings on money being held in trust by a funeral home, and contracts can get lost.”
What has attracted people to preneed or prepaying a funeral for a generation has been the promise that one can lock in today’s prices for funeral and not have to pay more later.
In this economy this is simply not the case. It is my opinion that “any honest Funeral Director will not sell you Guaranteed Preneed” now. In this fragile economy investments can not be guaranteed now or in the near future.
They certainly cannot guarantee any investment or bank account 5-20 years out.
As i have said before it is best for the funeral consumer to not do funeral preneed or prepay a funeral.
The two scandals mentioned at this blog the IFDA Preneed Trust mess (Illinois Funeral Directors Association) and the National Prearranged Services(NPS) scandal alone are reason enough not to prepay a funeral.
In the article the Wall Street Journal said a quiet “No” to funeral preneed.
Funeral industry|funeral blog by your funeral guy.
UPDATE: MAY 3rd 2009 This blog post encourages you to avoid guaranteed preneed, other non guaranteed approaches may be viable. Certainly reputable life insurance is an option.
Your Funeral guy is not affiliated with Joshua Slocum, and is simply pointing out here that the Wall Street Journal has quietly steered the folks away from preneed.
Wall Street Journal pic from flickr under the creative commons license from