Revealed Differences between Funeral Preneed Insurance Scandals-YourFuneralGuy

27 Apr

Best not to purchase preneed,too much behind the scenes SHHH  and Scandal

Best not to purchase preneed,too much behind the scenes SHHH and Scandal

Preneed  or Prepaid  funerals has had major disasters. In 2008 the NPS  disaster took place came to a breaking point on September 22nd 2008.

In 2oo9 the Illinois Funeral Directors Association Historic Preneed Scandal came to ahead with the revelation of Lawsuits and major press coverage around February 1st.

NPS  and IFDA losses are estimated to be between 1 Billion and 1.6 Billion. The Funeral industry is often quoted as being a 15 billion dollar industry. So the loss in at National Prearranged services and IFDA s Preneed Trust is close to 10% of the funeral industry’s income.

Both the NPS and IFDA had ponzi like insurance scams. There are  main differences between the two is size. NPS lost over 1 Billion+ and the IFDA 59+million.

The IFDA used special key guy insurance life insurance policies. NPS used whole life and term insurance policies.

At NPS there was state investigations going back 10 years and more. Sure hope the IFDA mess investigations does not carry on that long.

In the NPS scenario it was known who the major players were and they were named often. This is not true of the IFDA Preneed Trust mess.

A good summary of the National Prearranged Services Scandal appeared in the State Journal Register over the Weekend.

“Consumers would buy funeral contracts from NPS that were funded with life insurance policies that paid out to funeral homes upon death. Under state laws, funeral homes that agreed to do business with NPS were obligated to pay for funerals if something went wrong. And things went horribly wrong last year…..The insurance policies were issued by two Texas-based companies affiliated with NPS. At some point, regulators say, policies were switched from whole life insurance, which has some value so long as premiums are paid and remains in force until death, to term life insurance, which expires after a set period of time and has no value unless someone dies. Financial ruin ensued.

Any time funeral funds are misappropriated some one has to pay. It is usually the Funeral Director and the Funeral Consumer.

Sadly these events have moved the public away from trusting funeral professionals.

Funeral Industry|Funeral Costs Blog by Your Funeral Guy


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