Regulatory & Compliance Knowledge Flashcards

What is an irrevocable funeral trust primarily designed to accomplish in Medicaid planning?

Answer: Set aside funds for funeral costs that are generally not counted as available resources

Properly structured irrevocable funeral trusts are generally excluded from countable resources for Medicaid eligibility, subject to state law.

What distinguishes a guaranteed preneed contract from a non-guaranteed one?

Answer: Guaranteed contracts lock in the price of the specified goods and services

A guaranteed contract fixes the price of the selected goods and services regardless of future cost increases.

Preneed funeral funding with life insurance is typically regulated primarily by which entity?

Answer: State insurance department

Insurance-funded preneed involves insurance products, which states regulate through their departments of insurance.

A consumer relocates to another state after buying a preneed contract. Which feature helps most?

Answer: Portability of the contract to a provider in the new location

Portable or transferable contracts let funds follow the consumer to a new provider, subject to state rules.

In most states, a funeral home accepting preneed payments must generally do what with the funds?

Answer: Deposit required percentages into a trust or fund the contract with insurance

State preneed laws require trusting a specified percentage of payments or funding through insurance to protect consumers.

When a consumer cancels a revocable preneed contract, what generally governs the refund?

Answer: State preneed law and the contract terms

Refund rights on revocable contracts are set by state statute and the contract's terms.

Why must a preneed consultant be properly licensed before selling?

Answer: State law typically requires preneed sellers or insurance agents to be licensed, and unlicensed sales can bring penalties

Most states require preneed seller licensing and, for insurance-funded plans, an insurance producer license.