Frequently asked questions about Pre-Planning
What is the difference between final expense, pre-arranging and pre- funding?
Final expense policies set money aside for the future use of paying for a funeral
or cremation at the time of a person’s death. No merchandise or services are preselected
so there are no price guarantees associated with a final expense policy.
Pre-arranging is the process families go through to make decisions about how you
want your funeral or cremation performed and what casket, urn, flowers, etc. You
want at your funeral. Pre-arranging records your wishes so that your loved ones
can avoid having to make difficult decisions during an emotional time.
Pre-funding is paying in advance for your pre-arranged funeral or cremation. In
many instances, per-funded contracts lock in the cost of the merchandise and services
selected at today’s prices, protecting those prices from inflation.
Pre-arranging and pre-funding a funeral or cremation minimizes the financial burden
on your family because you are locking in the prices of today for a funeral or cremation
in the future and you aren’t making decisions at the time of death, which may result
in emotional overspending.
What is pre-need insurance?
Pre-need insurance is the funding vehicle used by funeral homes when pre-funding
your funeral. It is similar to all life insurance products and there are numerous
types of policies. There are whole life polices, whole term, 3,5,10 year term and
annuities.The main difference is, you take these policies out just to fund your
What is the difference between a traditional life insurance policy and pre- need
funeral insurance policy?
Traditional life insurance is intended to provide for your survivors’ future financial
needs, such as income, education costs, and mortgage payments. Pre-need funeral
insurance is specifically intended to cover the predetermined costs of your prearranged
funeral. The growth that accumulates on your funds is then used by the funeral home
to offset inflation from the day you prearrange to the date of your death. .
What is the benefit of pre-arranging my funeral now?
In recent years, more and more people have opted to take matters into their own
hands and make funeral arrangements prior to their death. These arrangements are
commonly referred to as Pre-planning or prearranging. Many people find that Pre-planning
gives them peace of mind knowing that their wishes will be respected and the family
has fewer burdens from making decisions about funeral arrangements at the time of
their death. Others find that by pre-arranging and pre- funding their funeral or
cremation expenses, any additional life insurance they have can be used for its
What is Pre-planning for my funeral like? What can I expect?
Pre-planning your funeral consists of meeting with the counselor at Lowell-Tims
to record information necessary to choose the type of service you desire, including
the type of casket, concrete vault or cremation urn. Once your per-arrangements
are made, you may per-pay your funeral to secure the majority of the price at today’s
Why should I prepay when I make my pre-arrangements?
Pre-funding means paying for your funeral pre-arrangements while you are alive,
rather than having someone else or your estate pay for your arrangements after your
There are several reasons why you should fund your pre-arrangement in advance.
Guarantees that the funeral services will be carried out at little or no additional
cost to your family.
Prevents other life insurance policies from being depleted at the time of a loved
one’ s death.
Allows you to consider cost-effective options at a time when you are better prepared
to make sound, fiscally responsible decisions.
Provides payment flexibility.
Allows you to shelter assets when applying for D.H.S. In Oklahoma, D.H.S. will allow
you to spend-down $10,000 (apply that much money on a funeral plan) If this may
be an issue for you, please consult with your legal advisor.
Isn’t funeral planning primarily for the older generation?
Funeral planning is for anyone who is interested in sharing their desires, relieving
their family of difficult choices and unnecessary expense, and making important
decisions without the pressure of illness or circumstance. There may also be other
financial benefits to pre-funding your funeral at a younger age.
How much does pre-need funeral insurance cost?
The cost of the insurance used to fund your pre-arranged funeral depends on
the cost of the merchandise and services you select for your funeral during the
prearrangement process. As it relates to your insurance payments, you can make a
single premium payment and owe nothing further or you can choose a plan that provides
insurance coverage while you make payments over several years. You may also choose
to have the monthly payments withdrawn from your checking or savings account automatically.
The choice and the control are all yours. When you per-fund with Lowell-Tims you
are assured flexible payment options to fit your financial situation. Our wish is
to make funding your funeral or cremation as simple as possible for you.
Where does my money go?
Premiums are paid to our trust company or insurance carrier that is underwriting
the policy. Monies are used to pay expenses and establish reserves, which are used
to pay future claims benefits as they come due. The death benefit is designed to
grow over time to help cover the rising cost of funerals. At the time of death,
the death benefit is paid to the funeral home after the funeral home delivers the
merchandise and services.
Can I change my mind after pre-arranging or if I cannot afford my payments?
Most insurance companies offer a 30-day free look period at the beginning of the
contract. If, for any reason you choose not to continue the contract, you may cancel
in the first thirty (30) days and the insurance company will refund all premiums
From time to time financial circumstances change. If that is the case, call Lowell-
Tims to find out what options are available. One thing to keep in mind is that if
you quit making your premium payments you will lose the cost guarantee associated
with prearranging your funeral and locking it in at today’s prices.
If I make pre-arrangements with my hometown funeral home and later move to a different
city, can my funeral pre-arrangement be transferred?
Insurance companies will pay the death benefit to any funeral home that provides
your services. Many people move to another town or simply change their preferences
of funeral homes. If you want to change your funeral home preference prior to your
death, you may contact the funeral home of your choice to determine if they will
honor the price guarantees offered by the funeral home where the pre-arrangement
contract was written. If they do accept the charges, then notify the funeral home
that you have changed funeral home locations. Regardless, at the time of death,
the company that underwrites the policy will pay the funeral home that performs
How do I file a claim and how long does it take?
Lowell-Tims will file your claim for you. Most companies will mail a check within
48 hours of receiving notification .
Are there tax issues with pre-need insurance?
No. As a general rule, pre-need life insurance benefits are paid in a lump sum to
the funeral home and have no tax consequences to you or your family. Please consult
with your tax advisor regarding the possible tax implications given your specific
What if I cannot afford to buy a pre-need plan right now?
At the very least, record your wishes with your preferred Lowell-Tims Funeral Home.
In case of an early or unexpected death, your family will know your desires and
be relieved of making difficult decisions when distraught and emotional. Funeral
arrangements can be funded at a later time.
What if I am simply interested in setting aside funds for my funeral expenses and
not ready to select specific funeral homes or funeral services?
Final expense plans are available for this type of coverage. Final expense means
that you can choose any amount of money to be paid to your beneficiary at the time
of your death. This money is specifically designated to help pay for your funeral
arrangements or expenses related to death, whatever they may be.