Preneed Funeral PlanningWhere to Start?????

Kevin Hazlip, CFO

Hiers-Baxley Funeral Services

Highland Memorial Park Cemetery

Definition of Preneed

Why people prearrange

Who are the ones prearranging

How do you prearrange

What is the definition of Preneed??

• The answer is-----• It is somewhat unclear

Technical

• Dictionary.com• An adjective• arranged or made available in advance of

eventual requirements

Federal Government

• Funeral Homes regulated by the FTC• 16 CFR Part 453 ---- Funeral Rule• Preneed is not defined

State Government

• Funeral Homes regulated by the DFS• 497.005 definitions• Preneed is not defined• However a preneed contract is defined• Preneed contract means any arrangement or

method, of which the provider of funeral merchandise or services has actual knowledge, whereby any person agrees to furnish funeral merchandise or service in the future. (blah, blah, blah)

Industry Definition

• In our industry we can basically sum it up in two words------

••••••••••••••••••••••••••••••••••

NERVE GAS

Why people prearrange To express their own wishes, known

only to them To relieve their family from the stress of

making decisions/arrangements while in shock and grief

To save their family from an unexpected financial burden at a time when it may be very difficult

To benefit by “locking in” today’s funeral price

Why more people prearrange each year

0

2,000

4,000

6,000

8,000

10,000

1969 1979 1989 1999 2009

Funeral Costs Avoid INCREASING COSTS and relieve FINANCIAL BURDEN

from surviving family

Over 100 things to do or decide

• Doctor• Funeral Director• Banks• Clergy• Unions & Fraternal

Organizations• Newspaper• Friends• Employer

• Coroner• Cemetery• Insurance Companies• Other Financial

Institutions• Relatives• Pallbearers• Singer• Organist

Contact...

To Do...• Provide deceased’s vital statistics• Complete needed paperwork• Provide addresses of people to notify• Answer phone calls and letters• Meet several people to complete details• Greet friends/relatives who come by or call• Prepare house for guests• Arrange other lodging for guests• Prepare funeral car list

Over 100 things to do or decide

• Funeral Service• Casket or Urn• Clothing• Music• Church• Time/date of

visitation• Location

• Burial Space• Vault• Flowers• Catering/food• Time/date of service• Transportation• Acknowledgement

cards

Choose ...

Over 100 things to do or decide

Over 100 things to do or decide

• Doctor• Hospital• Medicine/Drugs• Funeral• Interment Fee• Clergy• Singer• Clothing

• Nurse• Ambulance• Cemetery Property• Organist• Florist• Memorial• Transportation• Food/Catering

Arrange to pay for ...

Who are the ones prearranging?

Sex

MaleFemale

Marital Status

Married

Widowed

Not Married

0 10 20 30 40 50 60

Percentage

Ages of people who prearrange

Young

Boo

mer

s 55

Leadi

ng E

dge B

oom

ers

55-6

4

Silent

s 6

5-85

GI Gen

erati

on 86

+0

20406080

Percentage

Percentage

Main reasons people decided to prearrange• 3% - Recently prepared/updated will• 4% - Recently worked on planning estate• 4% - Medicaid spend down• 5% - Have serious/terminal illness• 7% - Received call/mail about prearranging• 15% - Finally had money to do it• 15% - Spouse wanted to prearrange• 16% - Finally knew arrangements wanted• 23% - Family member/friend died recently

Reasons for prearranging

• Making decision with spouse• Eliminate financial burden from spouse• Eliminate emotional burden from spouse• Choosing desired arrangements• Locking in Prices• Eliminate financial burden from kids• Fulfilling responsibility• Eliminate emotional burden from kids

How do you prearrange?

How families pay for funerals

• Savings in advance• Savings later• Existing regular insurance• Taking out a loan• Selling assets• Family bears the burden

Methods for paying for prearranging

• Insurance Funded • Trust Funded

Insurance Funded

Advantages• Immediate Coverage• Annual Growth• Portability• Price lock

Disadvantages• Pmt amount on multi pay• Insurance company is go

between• Limited refundability

Trust Funded

Advantages• Managed Portfolio• Price lock on single pay

Disadvantages• Lack of portability• Limited refundability• Price lock on multi pay

Final Thought

Guaranteed Pricing – Is it over ??