A pre-arranged funeral plan is a contract with a funeral home that lets you plan and pay for your funeral in advance. You can pay in either a lump sum payment or installments. Your funds are held in a trust account until the services are needed. To protect you and your money FCNB has requirements for how these contracts are made and requires that each funeral home and the funeral home’s manager be licensed.
What agreements do the requirements apply to?
The requirements for pre-arranged funerals apply only to contracts paid for by funds that are deposited into a trust account. The rules do not apply to:
- pre-arranged funeral plans purchased through contracts for insurance;
- or the purchase of services offered at a cemetery.
How is your money protected?
Whenever you make a payment towards your pre-arranged funeral plan, the funeral home must give you a receipt and deposit your money into a trust account within 10 working days. Then the funeral home has 15 working days to provide you with proof that the funds have been deposited in trust, in your name, at a financial institution.
What Your Contract Must Tell You
When you buy a pre-arranged funeral plan, the funeral home must use a contract form prescribed by the Regulation and available through FCNB. This makes sure that you are given all important information about the transaction such as:
- Name and date of birth of the person the plan was bought for (the beneficiary)
- Name of the person who bought the plan (the purchaser)
- Description of the goods and services to be included in the plan
- Description of goods and services that are not included in the plan
- The rights that you and the funeral provider (or their representatives) have if either of you decide to terminate, cancel or discontinue the plan, or fail to meet your obligations under the plan
- The penalty when a plan is terminated or cancelled
- Amount of money paid toward the plan
- Date that the remaining balance is owing
Cancelling a Contract
You, or your legal representative, have the right to cancel the contract without penalty within 7 days of entering into the agreement. If the contract is cancelled after 7 days you or your legal representative may have to pay a fee of up to $250. By law funeral homes are allowed to charge up to $250, but if the cancellation fee in your contract is lower they must only charge you that amount.