FUNERAL PREARRANGEMENT TEST 2027 ANSWERS
AND QUESTIONS SET A+
✔✔What is a revocable contract in the context of pre-need arrangements? - ✔✔A
contract that can be terminated by the purchaser at any time prior to death, with a
refund as prescribed by state law.
✔✔What is an irrevocable contract? - ✔✔A contract that cannot be terminated or
canceled.
✔✔What does a guaranteed contract ensure? - ✔✔That services and merchandise will
be provided at the time of need for an amount not exceeding the original contract
amount, plus interest.
✔✔What is a non-guaranteed contract? - ✔✔A contract where the prepaid amount, plus
interest, will be credited to the balance due, but the price will be whatever the current
price is at the time of death.
✔✔What are the three factors funeral home owners must balance when considering
pre-need cost guarantees? - ✔✔1. Inflationary cost of providing merchandise and
service. 2. Return on the money held for the funeral. 3. Length of time between contract
purchase and date of death.
✔✔What are the four types of funding for pre-need contracts? - ✔✔1. Insurance single
payment 2. Insurance installment payment 3. Trust single payment 4. Trust installment
payment
✔✔What is the mortality rate for single payment contracts within the first two years? -
✔✔20%
✔✔What is the average span for the second 50% mortality for installment payment
contracts? - ✔✔15 years
, ✔✔What are the top motivators for prearranging according to Steve Cronin? - ✔✔1.
Recent family member death 2. Knowing the desired arrangements 3. Having the
money to prearrange 4. Spouse wanting to prearrange
✔✔What is a potential negative aspect of prefunding for pre-need contracts? - ✔✔Some
states do not allow prefunded contracts to be transferred to another funeral home.
✔✔What might happen if a consumer dies before the usual excusatory timeline? -
✔✔Only the amount paid to date will be refunded with an insurance funded contract.
✔✔What can devalue the accumulated potential income for a funeral home? - ✔✔If the
person cancels the contract.
✔✔What is the implication of guaranteeing contracts for funeral homes? - ✔✔They may
lose money on the future funeral if costs exceed the guaranteed amount.
✔✔What percentage of policy owners had already recommended prearrangement
shortly after making their own arrangements? - ✔✔More than 40%
✔✔What is the impact of providing a great experience for client families? - ✔✔It secures
their recommendations.
✔✔What is a common misconception consumers might have about prearrangement? -
✔✔That everything is taken care of financially without any unplanned payments.
✔✔What is the average age at issue for those buying single payment contracts? -
✔✔Older than those buying installment payment contracts.
✔✔What is the mortality rate for installment payment contracts within the first 15 years?
- ✔✔50%
✔✔What is a common motivation for individuals on social assistance to prepay for
funerals? - ✔✔Funerals are an allowable use of funds that will not be considered in the
five-year look back for social assistance consideration.
✔✔Who often refers individuals to prepay for funerals? - ✔✔State social workers or
financial planners.
✔✔What is the motivation for individuals who have recently suffered a personal loss to
prepay for funerals? - ✔✔Preparation and 'being ready' for their own future
arrangements.
AND QUESTIONS SET A+
✔✔What is a revocable contract in the context of pre-need arrangements? - ✔✔A
contract that can be terminated by the purchaser at any time prior to death, with a
refund as prescribed by state law.
✔✔What is an irrevocable contract? - ✔✔A contract that cannot be terminated or
canceled.
✔✔What does a guaranteed contract ensure? - ✔✔That services and merchandise will
be provided at the time of need for an amount not exceeding the original contract
amount, plus interest.
✔✔What is a non-guaranteed contract? - ✔✔A contract where the prepaid amount, plus
interest, will be credited to the balance due, but the price will be whatever the current
price is at the time of death.
✔✔What are the three factors funeral home owners must balance when considering
pre-need cost guarantees? - ✔✔1. Inflationary cost of providing merchandise and
service. 2. Return on the money held for the funeral. 3. Length of time between contract
purchase and date of death.
✔✔What are the four types of funding for pre-need contracts? - ✔✔1. Insurance single
payment 2. Insurance installment payment 3. Trust single payment 4. Trust installment
payment
✔✔What is the mortality rate for single payment contracts within the first two years? -
✔✔20%
✔✔What is the average span for the second 50% mortality for installment payment
contracts? - ✔✔15 years
, ✔✔What are the top motivators for prearranging according to Steve Cronin? - ✔✔1.
Recent family member death 2. Knowing the desired arrangements 3. Having the
money to prearrange 4. Spouse wanting to prearrange
✔✔What is a potential negative aspect of prefunding for pre-need contracts? - ✔✔Some
states do not allow prefunded contracts to be transferred to another funeral home.
✔✔What might happen if a consumer dies before the usual excusatory timeline? -
✔✔Only the amount paid to date will be refunded with an insurance funded contract.
✔✔What can devalue the accumulated potential income for a funeral home? - ✔✔If the
person cancels the contract.
✔✔What is the implication of guaranteeing contracts for funeral homes? - ✔✔They may
lose money on the future funeral if costs exceed the guaranteed amount.
✔✔What percentage of policy owners had already recommended prearrangement
shortly after making their own arrangements? - ✔✔More than 40%
✔✔What is the impact of providing a great experience for client families? - ✔✔It secures
their recommendations.
✔✔What is a common misconception consumers might have about prearrangement? -
✔✔That everything is taken care of financially without any unplanned payments.
✔✔What is the average age at issue for those buying single payment contracts? -
✔✔Older than those buying installment payment contracts.
✔✔What is the mortality rate for installment payment contracts within the first 15 years?
- ✔✔50%
✔✔What is a common motivation for individuals on social assistance to prepay for
funerals? - ✔✔Funerals are an allowable use of funds that will not be considered in the
five-year look back for social assistance consideration.
✔✔Who often refers individuals to prepay for funerals? - ✔✔State social workers or
financial planners.
✔✔What is the motivation for individuals who have recently suffered a personal loss to
prepay for funerals? - ✔✔Preparation and 'being ready' for their own future
arrangements.
