Pre-Planning a Funeral

Rich and Thompson Funeral and Cremation Service offers our families the opportunity to prearrange funerals for themselves or their loved ones. By doing so, you are making your wishes known to those left to plan your funeral and you are providing a means to relieve them of the financial responsibility of paying for your funeral expenses. 

Before making decisions about your funeral service, you need to become better informed about the pre-arrangement process. North Carolina has some very specific laws in force to protect the consumer from fraud and misuse of pre-need funds and the Federal Trade Commission also has guidelines that must be followed when arrangements are being discussed.

Rich and Thompson Funeral Service works with the Forethought Life Insurance Company to offer our families a variety of payment plans for pre-funding funerals. Pre-need funding offers protection against inflationary increases in the cost of funeral services and merchandise. Please look at our Frequently Asked Questions for more information on how this works. For more information about the NC laws governing pre-need, visit the North Carolina Board of Funeral Service website.

If you desire additional information, Rich and Thompson Funeral and Cremation Service has several funeral directors that are very knowledgeable in the rules governing the pre-arrangement  process. Please feel free to contact the funeral home for an appointment to learn more about how Rich and Thompson can help you make informed decisions about prearranged funerals.

Frequently Asked Questions
Concerning Preplanned Funerals and Accounts

Is there a charge for making pre-arrangements? 

 Not at Rich and Thompson. There are some funeral homes that do charge a fee for consultation, but we feel it is part of our responsibility to provide information to the consumer so that they can make decisions that are best for them.

If I make pre-arrangements, do I have to pay anything for the services or merchandise now?

No, you do not. Prepayment is an option that you have, but it’s only a part of making pre-arrangements. Providing us with biographical information and putting your desires concerning your service in writing is extremely helpful to your family.

If I do pay for my funeral ahead of time, what happens to the money?

North Carolina law is very specific in stating that any money brought to us must be placed into an approved insurance vehicle. We do not retain any of the funds given to us. At Rich and Thompson, we currently fund our pre-need funerals with an inflation adjusted life insurance policy issued by the Forethought Life Insurance Company.

If I pay for my funeral now, does it freeze the prices of the services and merchandise I pay for?  

No, it does not. The cost of services and merchandise will continue to rise over the life of the account. This is due to increases in overhead, supplier cost, etc. We do, however, give you written assurance that those responsible for your funeral arrangements will not pay any additional funds for the same services and merchandise that were originally selected.

If the prices aren’t frozen, how do you do this?

The life insurance policy that we purchase with the pre-need funds is inflation adjusted. Over the life of the policy the face amount is increased at the discretion of the insurance company. It is this increase in the face amount that we use to offset any increase in our cost.

What happens when the face amount is less than the cost of the items we paid for?

This does sometimes happen. In this situation Rich and Thompson, by our contractual agreement with you, discounts our cost down to the available amount. The family does not pay in additional funds.

What happens when the face amount is more than the cost of the items we paid for?

Under North Carolina law, the funeral home is entitled to keep the excess funds in the account. However, at Rich and Thompson, we feel that these funds belong to the family, not to us. The family is either refunded the excess funds, or we allow them to use them to fund an item of the funeral that may not have been originally funded.

What items can be funded and guaranteed with this type of policy?

You can pay for services and merchandise and receive assurance that you will not pay any additional funds for those items. Services can include, but are not limited to the professional services of the funeral director, preparation of the body, use of the facilities, use of vehicles, cremation, transfer to other funeral homes, etc. Merchandise can include caskets, vaults, urns, clothing or other sundry items.

What items can not be funded or guaranteed with this type of policy?

Virtually anything can be funded through the policy, but you do not have the assurance of not having to pay additional funds in the future for these items. Basically, anything that Rich and Thompson has no control over the cost of, is not guaranteed to cost the family more at the time of death. Examples of these items include North Carolina sales tax, flowers, grave charges, obituaries and honorariums. The funds placed aside for these items do grow at the same rate as the other funds in the account, so there is the possibility that the growth of these funds could offset any increase in their cost.

Are their restrictions on who can fund their funeral through this type of policy? 

No, we have used this type of policy to fund funerals for people in their 30’s to 90’s. It is guaranteed issue. However, there are certain limitations to the amount of money paid out for death by natural causes that occur less than 6 months into the life of the policy. After 6 months, the full-face amount is paid. Accidental deaths have full coverage from the date of policy issue.

Do I have to pay for everything at one time?

No, while it is in the best interest of the consumer to pay for everything at once, it is not required. Scheduled payments may be made for 3, 5, 7 or 10 years, depending upon a person’s age. These payments may be annual, quarterly or monthly. You should be aware that the total cost of making payments would exceed the original cost of the funeral selected.

Why is that?

The factors used to calculate scheduled premium payments include a person’s age, the length of time they wish to pay and the cost of the service and merchandise selected.  Included in your premium are administrative cost to the insurance company and the cost of insurance. You should carefully consider these factors when you are deciding on how to fund your policy.

Is there anyway to fund a funeral without having to make regularly scheduled payments?

Yes, Forethought offers an option called the Flex Plan. You can think of this plan as being similar to a savings account. You can begin this plan with a minimum of $100.00. After your initial $100.00 premium payment, you may add to this account whenever and however often you choose. The only requirement is that your payment be at least $25.00. The payments you make to Forethought accrue dividends just like a single or monthly premium account does. Depending upon how long you take to pay for the service and how much you pay, determines the total amount you pay in. The original cost of the service and merchandise that you selected is increased by 4% annually. This closely mirrors the average annual increase in funeral expenses. Once you have paid for the selected items, plus the increase, you receive the same assurances concerning inflation protection that a regular policy has.

I have life insurance policies with other companies; can I use them to fund my pre-need funeral?

Depending upon the provisions of the policy that you have, you may be able to make the funeral home beneficiary of the policy. This, however, does not grant you any inflation protection. The majority of life insurance policies enforce are non-participating, which means they do not pay dividends. The face amount of these policies tends to remain the same over the life of the policy, unless it has a graded death benefit. You may still use the death benefit of the policy as a credit towards your final funeral expenses, but it’s still possible those responsible for your expenses will owe the funeral home more money.