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April 2000
Consumers
are Protected When Prearranging or Arranging Funerals
In keeping with their long-standing tradition
of caring, funeral directors remain dedicated to helping families
cope with end-of-life matters with quiet professionalism and attention
to detail. They undergo a rigorous regimen of college-level study
in mortuary arts and sciences, and funeral service. Before being
licensed by the New York State Department of Health to operate as
a funeral director, the aspiring funeral director must pass examinations
on funeral directing and the laws, rules and regulations governing
funeral directing.
As with many other suppliers of consumer
goods and services, the funeral industry is subject to both Federal
and State laws. One important regulation to protect consumers is
the Federal Trade Commission's Funeral Rule which requires funeral
homes to make available a general price list which details the cost
of all funeral products and services being considered. Unfortunately,
this requirement does not now extend to other providers of funeral
goods and/or services such as casket stores, cemeteries and companies
selling on the Internet. However, the rule may soon be amended to
include these other providers in giving consumers useful information
and the appropriate protection, no matter where or how consumers
purchase funeral products.
Thanks to legislation passed in New York
State in 1993, all funds paid in advance for a funeral must be deposited
in an investment backed by the United States government such as
FDIC insured certificates of deposit (or a New York State bank).
Account statements showing interest earned must be reported annually
to the consumer, or within 30 days after the consumer's request.
All funds are completely portable to any funeral home anywhere at
any time; all funds must be repaid to the consumer upon their request
(with the exception of Medicaid recipients). The law also requires
that there be no commission, fee or other monetary consideration
of any kind paid to a funeral firm or funeral director as a result
of where the consumer's dollars are placed in trust.
Although preneed insurance which would allow
funeral firms to be named as beneficiaries of dedicated preneed
life insurance policies exists in some other states, New York State
does not allow this form of payment for funerals -- and for good
reason. This type of insurance is usually expensive; does not keep
pace with inflation and has few if any protections for consumers'
money. For instance, if the purchaser stops paying premiums for
preneed insurance, they lose all benefits.
Even though arranging a funeral occurs at
a stressful time, the wise consumer should remember to ask questions.
Funeral directors expect questions, and are always ready to consult
with families as partners to ensure a dignified and appropriate
remembrance of a loved one's life.
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