CPC Preneed Financial Planning & Contracts 2

Question 1

What is 'portability' in the context of preneed funeral contracts?

Accepted Answer

The ability to transfer a preneed contract to another funeral home

Answer

Portability refers to the ability to transfer a preneed contract from one funeral home to another, which is important if a person relocates or if the original funeral home closes.

Question 2

What percentage of preneed contract funds are most US states required to place into trust?

Accepted Answer

90%

Answer

Most US states require that at least 90% of preneed contract funds be placed into a regulated trust account, though some states require a higher percentage.

Question 3

Which document must a preplanning consultant provide to a client before they sign a preneed contract?

Accepted Answer

General Price List (GPL)

Answer

The FTC Funeral Rule requires that a General Price List be provided to any person who inquires in person about funeral arrangements or the prices of funeral goods or services.

Question 4

A preneed contract is considered 'irrevocable' when:

Accepted Answer

The client cannot cancel or change the contract without the funeral home's consent

Answer

An irrevocable preneed contract cannot be canceled or materially altered without consent from the funeral home, and is often required for Medicaid spend-down purposes.

Question 5

For Medicaid eligibility purposes, which type of preneed contract is typically excluded from countable assets?

Accepted Answer

Irrevocable preneed contract

Answer

An irrevocable preneed contract is generally excluded from Medicaid countable assets because the funds are permanently committed to funeral expenses and cannot be reclaimed by the individual.

CPC - Certified Preplanning Consultant Practice Test

CPC - Certified Preplanning Consultant Practice Test

CPC Preneed Financial Planning & Contracts 2