Funeral Services Preneed Funeral Planning

Question 1

What federal rule requires funeral homes to provide itemized pricing information to consumers?

Accepted Answer

The FTC Funeral Rule

Answer

The FTC Funeral Rule (16 CFR Part 453) requires funeral providers to give consumers itemized price information and a General Price List upon inquiry.

Question 2

A preneed funeral contract funded through a life insurance policy is best described as what type of arrangement?

Accepted Answer

Insurance-funded preneed

Answer

An insurance-funded preneed contract uses a life insurance policy assigned to the funeral home to fund the prearranged funeral services.

Question 3

In most U.S. states, what percentage of preneed funds collected must be placed into a trust?

Accepted Answer

90% to 100%

Answer

Most states require 90% to 100% of preneed funds to be deposited into a regulated trust to protect consumers.

Question 4

Which of the following best defines an 'irrevocable' preneed contract?

Accepted Answer

A contract that cannot be cancelled or transferred without the beneficiary's death

Answer

An irrevocable preneed contract cannot be cancelled by the purchaser and is often required for Medicaid eligibility because the funds are not counted as assets.

Question 5

What is the primary purpose of preneed funeral planning from a consumer standpoint?

Accepted Answer

To relieve survivors of decision-making burden and lock in current prices

Answer

Preneed planning allows individuals to make their own arrangements in advance, relieving family members of emotional decisions and potentially locking in current pricing.

Funeral Services Practice Test

Funeral Services Practice Test

Funeral Services Preneed Funeral Planning