TO WHOM IT MAY CONCERN
The following policy entitled, “Policy Statement - Use of Life Insurance for the Purpose of Funding a Preneed Contract”, is in effect. Please read the Policy Statement. It was revised and approved by the Board of Morticians at its November 8, 2000 Board meeting.
Use of Life Insurance for the Purpose of Funding a Preneed Contract
As a result of the Insurance legislation which was passed during the 1999 Legislative Session, the Board of Morticians has approved a policy which was voted effective September 13, 2000. The revised policy, approved by the Board on November 8, 2000, is as follows. Implementation of disciplinary action will take place effective December 1, 2000. After this date, the Board will pursue disciplinary action with the authority to levy a monetary penalty against the licensee and against the funeral home as noted in COMAR 10.29.10.
The Board was asked to clarify the following question.
Question: A funeral home hires a non-licensed individual who has an insurance license. Can this individual sell preneed policies but have the licensed mortician sign the preneed contract?
A consumer must meet with a licensed mortician, funeral director or surviving spouse to make or discuss all prearranged or preneed funeral arrangements. When discussing funding options such as trusting, or insurance, if an insurance policy is being considered, then a licensed life insurance agent can present insurance funding options.
In order to make a prepaid funeral contract that is guaranteed, the consumer must meet with a licensed mortician, funeral director or surviving spouse and receive a copy of a “Statement of Goods and Services” signed by a licensed mortician, funeral director or surviving spouse with their license number noted next to their signature. The “Statement of Goods and Services” is a list of those services and merchandise which the consumer has selected for their funeral.
Licensees are authorized under Health Occupations Article, Title 7, §7-405, Annotated Code of Maryland, to enter into preneed contracts and prearrangements with consumers. When this occurs, consumers feel confident that they have interacted with a licensed individual and that their funeral wishes are guaranteed. Funding for preneed contracts may be in the form of trusting or insurance. A mortician, funeral director or surviving spouse licensee with an insurance license may sell life insurance for the purpose of funding a preneed funeral contract.
There are many titles being used such as “advance funeral planners”, “grief counselors”, “funeral counselors” which are confusing for the consumer. The general perception is that these individuals are funeral directors and if these individuals, using these titles, are licensed insurance agents, a consumer may think that by purchasing a life insurance policy and filling out a “funeral service/merchandise wish list” that their funeral is guaranteed. This is not true and is misleading for the consumer. The consumer has the right to know the individual’s credentials.
Please note that all FTC requirements concerning the General Price List, Outer Burial Container, Casket Price List and embalming disclaimers, etc. are to be followed.