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Are Pre-Arranged Funeral Prices Locked In?


In January 2002, I prearranged my mom's funeral due to our families financial restrictions. I completed the contract and the funeral was to cost $4,527.00 plus $800 the day of the funeral for the cemetary and church. Mom has passed and now the funeral director presents me with a new contract with a $300.00 price increase. I have not signed the new contract. When you prearrange a funeral are the prices locked in or can they be changed?

When a prearranged funeral has been prepaid, and the funeral takes place within the same year as the arrangement, most funeral homes would honor the prepaid funeral. Many prepaid funerals have the money placed into an association master trust fund, or an insurance policy. The interest earned on these types of investments are used to keep up with inflation. This is how most funeral homes agree to honor a prepaid service. The bank that holds the master trust fund will set up the trust fund for a setup fee. The insurance based investment will give the insured a bigger benefit than the original amount paid. The insurance company will then pay out a commission to the agent for selling the policy. Either case, the bank or the insurance have paid out a commission to invest your money. The $ 300.00 amount sounds like it could be the company trying to gain back the commission dollars given to set up the account or the commission given to the counselor for selling the prepaid funeral. Another scenario can come from an increase from the cemetery. If the increase came from the cemetery, the funeral home generally does not have control over the prices of the cemetery. I hope I have not confused you with this answer. Good Luck. - Stephen Dawson

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