CPC Regulatory & Compliance Knowledge 3

Question 1

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

Accepted Answer

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

Answer

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

Question 2

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

Accepted Answer

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

Answer

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

Question 3

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

Accepted Answer

State insurance department

Answer

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

Question 4

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

Accepted Answer

Portability of the contract to a provider in the new location

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

CPC - Certified Preplanning Consultant Practice Test