Mors 200 Arts Final - Klicker Chapter 9 - Pre-Need
The concept of pre-need funeral planning dates back to Ancient Rome, where soldiers contributed to burial funds. It evolved through European trade guilds and early U.S. death insurance. Gaining renewed attention after the Civil War, it became more mainstream in the late 20th century.
Not new to the 21st century.
Roots can be traced back to Ancient Rome where soliders contributed to burial funds to insure burial with honor.
Later in Europe, trade guilds provided burial funds for people who regularly contributed to them.
In the United States the early 1800s death insurace was created as a means to provide for burials.
Civil War- Families contacted embalmers who followed the major battles and paid them fees ahead of time to prepare their loved ones if they were killed.
After the Civil War- existed in relative obscurity until the late 1970s and early 1980s when both the profession and the public seemed ready for the concept.
History of Pre-Need
Key Terms
Not new to the 21st century.
Roots can be traced back to Ancient Rome where soliders contributed to burial funds to insure burial with honor.
Later in Europe, trade guilds provided burial funds for people who regularly contributed to them.
In the United States the early 1800s death insurace was created as a means to provide for burials.
Civil War- Families contacted embalmers who followed the major battles and paid them fees ahead of time to prepare their loved ones if they were killed.
After the Civil War- existed in relative obscurity until the late 1970s and early 1980s when both the profession and the public seemed ready for the concept.
History of Pre-Need
Pre-funded funeral arrangements
Pre-planned funeral arrangements
Types of Pre-need Arrangements
Those funeral arrangements made in advance of need, including provisions for funding or prepayment.
Pre-funded Funeral Arrangements
Funeral arrangements made in advance of need that do not include provisions for funding or payment.
Pre-Planned Funeral Arrangements
The purchaser is able to make her wishes known to the next of kin.
Purchases may be less emotional so clearer and more intelligent decisions can be made.
The next of kin are relieved of the financial burden of the funeral service in the case of pre-funded contracts
Reduction of assets for Medicaid eligibility in the case of pre-funded contracts
Reasons for Pre-funded/Pre-planned Funeral Contracts
Revocable
Irrevocable
Guaranteed
Non-Guaranteed
Types of Pre-need Contracts
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| Term | Definition |
|---|---|
Not new to the 21st century. Roots can be traced back to Ancient Rome where soliders contributed to burial funds to insure burial with honor. Later in Europe, trade guilds provided burial funds for people who regularly contributed to them. In the United States the early 1800s death insurace was created as a means to provide for burials. Civil War- Families contacted embalmers who followed the major battles and paid them fees ahead of time to prepare their loved ones if they were killed. After the Civil War- existed in relative obscurity until the late 1970s and early 1980s when both the profession and the public seemed ready for the concept. | History of Pre-Need |
Pre-funded funeral arrangements Pre-planned funeral arrangements | Types of Pre-need Arrangements |
Those funeral arrangements made in advance of need, including provisions for funding or prepayment. | Pre-funded Funeral Arrangements |
Funeral arrangements made in advance of need that do not include provisions for funding or payment. | Pre-Planned Funeral Arrangements |
The purchaser is able to make her wishes known to the next of kin. Purchases may be less emotional so clearer and more intelligent decisions can be made. The next of kin are relieved of the financial burden of the funeral service in the case of pre-funded contracts Reduction of assets for Medicaid eligibility in the case of pre-funded contracts | Reasons for Pre-funded/Pre-planned Funeral Contracts |
Revocable Irrevocable Guaranteed Non-Guaranteed | Types of Pre-need Contracts |
One in which the contract may be terminated by the purchaser at any tie prior to the death wtih a refund of the monies paid as prescribed by state law. | Revocable Contract |
One in which the contract cannot be terminated or canceled. | Irrevocable Contract |
Where the funeral home guarantees that the services and merchandise will be provided at the time of need for an amount not exceeding the original amount of the contract, plus any interest, regardless of the cost of providing the services and merchandise at the time of death. | |
When the funeral home only agrees that the amount prepaid plus any interest will be credited to the balance due. However, the price of the funeral will be whatever the current price is for the services and merchandise at the time the death occurs. | Non-Guaranteed Contract |
Klicker Page 100 | Consumer Attitudes Have you Made Pre-need Funeral Arrangements? |
Chosen cemetery plot- 33% Told another person of your plans - 32% Selected gravestone/monument- 24% Chosen cemetery- 15% Included directions in will or letter- 15% Pre-paid- 15% Selected funeral home- 12% Set aside money- 11% Chosen casket- 7% Selected inscription- 5% Arranged for flowers- 2% Made arrangements to be placed in mausoleum- 2% None- 3% | Types of Funeral Ralated Activities That were Pre-Arranged: |
Burial plot/property- 53% Monument/headstone- 29% Everything- 28% Services of a funeral home/director- 14% Casket- 13% Cremation- 12% Vault- 6% Flowers- 4% Insurance is paying for it- 4% Others- 3% | Sevice or Merchandise Pre-Paid: |
Counseling Management | Skills Needed for Doing Pre-Need |
By virture of personality, experience, and training, most funeral directors possess outstanding skills already Emphasis is not on grief, but on dealing with issues of personal finance and allocation of resources. A new area of responsibility, a new service dimension New skills must be developed to accommodate and effectively deal with change | Counseling |
Do it yourself Hire an employee Outsourcing | Implementing a Pre-Need Program |
For many small firms (less than 100 calls), the owner himself does the pre-need. In most of these situations- it is a passive pre-need program Funeral director wants people to come to him and request the pre-arrangements Generally not a successful way to build a pre-need program May lose future business to firms that have a dedicated pre-need employee | Do it Yourself |
Having one or more sales people to coordinate a pre-need program is really the only way for a funeral home to create an active effective program. Funeral homes doing less than 200 annual funerals that use this method average 77% more funded pre-need sales than similar sized firms using at-need directors who also do preneed. | Hire an Employee |
Hire an outside company that specializes in pre-need selling. Benefit is the magnitude of the resuts achieved. Usually generates the greatest number of pre-need sales in the quickest amount of time. | Outsourcing |
Each will require approaching the consumer in a somewhat different manner and a different style of marketing. Passive Pre-need Program Active Pre-Need Program | Pre-Need Styles |
A non-assertive approach Consumer receives pre-need information through brochures displayed in the funeral home, or through a yellow page or newspaper advertisement. Conducted by funeral directors that also do at-need arrangements Funeral directors do not look at themselves as sales people or that they are selling people a funeral Family selects what they desire without influence from the funeral director | Passive Pre-need Program |
Uses more than one marketing approach- direct mail, TV or radio ads, telephone solicitation, and public relations activities Funeral directors do not have other functions to perform in the funeral home, may not always be funeral directors, may be people sales experience (some states do not require a funeral director’s license, just a licensed insurance agent) More common sales techniques are used by sales people- may dismay funeral directors who have more of a counseling personality Techniques to generate leads: Referrals, at need funeral files, funeral register book, neighbors of deceased Approaches interview in a different manner- must convince the family to make a purchase More sales oriented- more sales techniques If the pre-need sale is made at the person’s home, the sale is regulated by the Federal Trade Comission Rule refers to any type of sale in the home provides a “cooling off” period which provides the purchaser with the right to cancel the sale within a specific time period. | Active Pre-need Program |
Asking the person who purchased the pre-need for names and phone numbers of their friends and family. The pre-need salespeople will then contact the referrals saying that Mr. ____ referred them. | Referrals |
The pre-need salesperson will review at-need files and contact the relatives listed in the file to see if they are interested in purchasing pre-need. | At-Need Funeral Files |
The pre-need salesperson will copy the names and addresses of people who signed the register book during the funeral or visitation and contact them. | Funeral Register Book |
The pre-need salesperson will contact the neighbors of a deceased as leads. | Neighbors of Deceased |
Differ from funeral home to funeral home Some states require the person to be a funeral director, others have no requirement unless insurance is used to fund the pre-need, then an insurance license is required. States that do not require a funeral director license- pre-need people are sales people most have a history of selling other products before working at funeral home Does not mean they are not caring, honest people | Pre-Need Staff |
72% have no staff dedicated to pre-need. At-need funeral directors generate pre-need sales. 15% have one pre-need representative for each 200 at-need funerals 13% have less than one full-time person per 200 at-need funerals. | Average Funeral Home Pre-need Staff (Insider Newsletter, January 10, 2005) |
Most businesses that involve sales have a foruma that gives an indication of how much prospecting (the act of generating leads) must be done to get appointments and how many appointments must be generated to achieve a number of sales. A rule of thumb in the aggressive preneed program is: 100 = 10 = 2.5
| The Numbers (Dan Isard, President of the Foresight Company) |
Depends on the laws of the state. Some states require that 100% of pre-need money to be put in a trust/bank account. Family can cancel the account at any time. Other states have regulations allowing a certain percentage of the total be used by the funeral director for an administrative fee. I.e. 90% can go into the account and 10% can be used by the funeral director. Specialized insurance policy | Methods of Funding Pre-Need |
Can be individual in that each pre-need contract is in a seperate account. Can be combined into a master trust A number of state funeral director associations have developed pre-need trusts for their members to use. Necessary to keep accurate records of all the contracts in the master trust so none are lost or have an incorrect total. | Trust |
The cost of this type of insurance policy can be paid in one lump sum or made in payments over a specific period of time such as five years. Some policies will not make a payment, or it will be reduced if the person dies within a specific time, such as one year from the date of purchase. | Specialized Insurance Policy |
The person making prearrangements expects their next of kin to honor their contract, but the next of kin in most states can have the legal right to change or cancel the contract and purchase the services and merchandise they desire instead. If different members of the family disagree- they can go to court and settle their differences. Judge will consider everyone's feelings and the wishes of the deceased. Often, if the judge feels that no one would be emotionally scarred by carrying out the terms of the funeral contract, he will judge in favor of the deceased's wishes. Judge will let the arrangements be changed if he felt it was in the best interest of the survivors. | Honoring the Contract |
Extends family loyalty Deters rising rate of cremation Provides some element of control over the inevitable cremation trend Improves overall community awareness Improves at-need business through increased community awareness. Broadens scope of services and overall family satisfaction Survivors are likely to also pre-arrange. | Pros of Pre-need (Funeral Director's Perspective) |
Requires full scale marketing and support. Shortfalls may undermine profit. Trusts magnify shortfall potential. | Cons of Pre-need (Funeral Director's Perspective) |
Most compelling reason for a funeral director- it is a proven way to secure growth and family loyalty. Beneficial and valued by the funeral directors and clients when the funds remain the property of the trustor and safely trusted until the services and merchandise are provided. When someone dies without pre-arranging, his or her loved one will have more than 70 decisions to make quickly and in a time of greiving. With pre-need arrangements, all your loved one has to do is get dressed and show up for the funeral. | More Pros of Pre-Need |
Junk-mailed, telemarketed, bargain-in-the-breifcase, flip-chart, pont-and-click brand of funeral sales that has infected funeral service for the past 25 years- has not been good for the funeral, funeral consumer or the funeral service profession. Driven by the interest of vendors, qouta and sales pitch, it has turned the funeral from a rich integenerational, family and community event into a primarily narcissistic one. Funerals, which were formally participatory and deeply meaningful events, are more often now done deals, spectator events. Family and friends need only to show up. Family didnt get to make any of the decisions they have to live with, | More Cons of Pre-need Arrangements |
NFDA- National Funeral Directors Association | Consumer Preneed Bill of Rights |