Best Illinois State Regulated Burial Plans

Written by Jeff Root

Illinois has some of the most comprehensive statutes concerning prepaid burial plans in the country. The regulatory body in the state is the Comptroller’s Office and each municipality regulates and enforces the funeral homes and cemetery associations in the state. Compliance with the laws governing burial and funeral arrangements is mandatory and funeral home directors must be licensed by the state.

With the advent of widespread embezzlement and fraud decades ago, especially in prepaid life insurance policies the state stepped in and created the Illinois Cemetery and Funeral Home Association, which oversees and maintains the records for the Department of Financial and Professional Regulation. The red tape flows, but the regulations are in place to keep people safe at a time when emotions are raw and manipulations can be easily rendered.

In Illinois, it is the law that each and every provision in a prepaid funeral or burial plan be told to the purchaser, by the provider. There no limits on what can be bought, or prepaid, but the provider must reveal all limitations and variations to the plan that can cost extra, or may not be covered in some future time.

Why is Burial Insurance Important?

Burial Insurance is an important part of the life insurance coverage most people need to have. Protecting a car, or a home, with insurance, is mandatory, and realistically a plan for a future negative event.

Why not plan for your death – the only guaranteed event in life?

Burial insurance is one of the best ways to make certain that funeral, burial, or cremation are paid for, whether or not you have other insurances. In this way, you assure your loved ones that your final arrangements are taken care of, and they can focus on celebrating your life, rather than figuring out how to pay for the final expenses.

What is Burial Life Insurance?

Burial life insurance is a small face value whole life policy, where the premium you pay never goes up, the policy lasts (if paid) until death, and the policy gains cash value you can borrow against. These policies are often called Simple, or Simplified whole life and many times are easier to attain than a large face value life insurance policy.

The idea behind burial insurance is to provide a foundation that surviving loved ones can work from. In most cases, there is little to no medical requirement, perhaps a few simple health questions and the policy is issued.

The premiums are the same each month and the policy never ends as long as the payments are made. These policies are usually $2,000 – $25,000 and can go as high as $50,000.

There are other types of burial plans in Illinois, such as prepaid burial plans and pre-planned burial plans. Let’s look at the prepaid plans and the attributes of those plans.

Should You Prepay Your Funeral?

This is a question that many people feel strongly about. Today many life insurance advocates vote against prepaying. But there are a great number of consumers who still feel that planning a funeral in advance is a positive thing.

Preventative measures are cited, as the reason to prepay a funeral or burial. Consumers have all heard the stories of people stuck with enormous, impossible to pay funeral bills after the loved one allowed their life insurance to lapse. The reason, if the loved one had prepaid, there may have been some cost, but not nearly as much as paying for the whole funeral.

There is a whole school thought surrounding preneed, but it is very easy to take the money and run with it, so to speak. Embezzlement and funeral home failure were rampant at one time.

The federal government stepped in and required that all funeral homes and cemetery associations be regulated by the states. Today, many states, including Illinois, have regulations surrounding prepaid funeral or burial plans. There is still a need for careful consideration of all the provisions of a preneed contract. Some of the types of contracts include:

  • Trust in the name of the insured
  • Letter of Credit, in the name of the insured
  • Life Insurance through a trust, in the name of the insured

Making sure all limitations and cost increases are laid out in the contract and that in the event of the funeral home going out of business, there is a refund of all money and the ability to place the money at a different home of the purchasers choosing.

A trust allows the funeral home to take the money at the time of demise, for the options paid in advance and held in trust. The provisions of the contract are fully maintained and the deceased is treated with the dignity and respect the surviving loved ones wanted. .

What is Included in a Prepaid Burial Service in Illinois?

The burial plans vary from person to person and from funeral organizations to cemetery associations. Many times there is a need for two contracts, one for the funeral home and one for a plot and memorial headstone or marker, from a cemetery association.

There are specific requirements for a prepaid funeral or burial plan, that are required by law:

  • If the decedent is to be embalmed it should be performed within 24 hours of death
  • If the decedent is not to be embalmed they should be refrigerated within 24 hours of death
  • If there is to be a viewing or event at the funeral home, that the options and costs must be clearly stated in the contract in an itemized list.
  • If there are any funds that might not cover a cost increase due to inflation, that cost must be clearly stated in contract.
  • All options and costs, limitations and varying charges must be told to the purchaser at the time the contract is bound.

The regulated options must be met, but the options for merchandise and services can vary greatly. Picking out all the various types of articles, events, and products you need when you die can be very depressing work.

But if it’s handled ahead of time, then there is much less burden on loved ones, and the insured can rest easy knowing that the most important aspects of their eventual demise are taken care of.

Some of the options that are included in the funeral plan are:

  • Casket
  • Special lining to the casket
  • Embalming
  • Storage
  • Viewing room
  • Viewing hours
  • Hearst rental
  • Flowers
  • Religious service
  • Religious merchandise

Options which may be included in a prepaid burial plan:

  • Burial plot
  • Memorial Niche
  • Headstone
  • Marker

There is a no limit on what can be purchased in a prepaid burial plan, but the usual cost of an Illinois funeral is $7,000. With that, it should be known that many insurance based burial plans have an upper limit of 12,500 because anything higher might be too much for the funeral home or cemetery association to carry, when the time comes to meet the terms of the contract.

How Much Does Burial Insurance Cost?

Most burial plans cost from $15.00 to $30.00 per month, usually with a graded payout in the first several years in case the insured dies early in the contract.

These figures are not written in stone, but Illinois requires that the trust state exactly what the terms of payment are and that they meet the minimum requirements of a preneed sale contract.

The purchaser is notified and made aware of the terms of the contract and it is decided before the contract is signed that the purchaser is in a position to meet the premium of the contract.

The total cost for a prepaid funeral runs $2,000 to $25,000, while a prepaid burial plan usually runs around $5,000 to $7,000.

What is Different in Illinois?

Illinois has extensive descriptions of its preneed sales regulations. The statutes are carefully worded and detailed. All types of monuments that could be purchased are listed with a description of what constitutes that type of resting place for human remains.

Every official and functionary, who is licensed and able to accept prepayment for a funeral or burial is described under each type heading and as to what their role is under the law.

What Are the Burial Insurance Regulations in Illinois?

The extensive regulations in Illinois are fairly stringent. The law allows for a preneed contract but it must be part of a trust, letter of credit or trust based life insurance.

The provisions of such a contract are carefully laid out under preneed sale in the regulations of the Comptroller of the state.

Every contract must comply with the regulations and license agreement of the state and must pass scrutiny and inspection at all times. Such provisions can include:

  • Who can sell a prepaid funeral or burial plan
  • What specific rights the purchaser has under a preneed contract
  • What type and function of merchandise and services can be pre-bought
  • What type of organization can hold a pre-need funeral or burial contract, in trust for a purchaser

What are the tax implications?

As with all plans, the money in the trust or insurance policy is held tax free until utilized. Once the funeral home or cemetery association collects the payment for its good and services tax is also collected at the state’s current sales tax rate.

Frequently Asked Questions

What is a pre-need burial contract?

Preneed burial contracts are specific financial tools for the prepayment of funeral services and merchandise purchased before the demise of the purchaser.

These terms are careful decided and documented by the state of Illinois. Usually pre-burial contracts are a trust instrument held by a third party for the express purpose of paying for the basic needs of burial or cremation.

What is a prepaid funeral contract?

Although similar to a pre-need burial contract, a pre-need funeral contract is a financial instrument that allows for the prepayment of goods and service surrounding the funeral aspect of the purchaser’s demise.

Is embalming required by law in illinois?

Although embalming is not required in Illinois human remains must be either embalmed or refrigerated no later than 24 hours after death is certified.

Finding the Best Burial Insurance Plan in Illinois 

With the greater width and breadth of regulation concerning prepaid funerals or burials, it can generally be said that a person desiring this type of arrangement can be more secure in the purchase in Illinois than in other states. With some research and careful planning, a prepaid funeral or burial can be had in Illinois without too much worry.

Depending on which state you live in, burial insurance plans can come with a long list of complications in terms of what needs to be provided, what types of coverage you are able to get, and the rates you pay.

Because of the complexities of these situations, it is recommended that you speak with an expert who knows the ins and outs of Illinois State Regulated Burial PLans in order to help you identify the best burial insurance coverage for you and your family.

Our agents represent some of the best burial insurance companies on the market and are able to help you understand your coverage options and find the best protection for you and your family.

Give us a call today to speak with an agent, or get started online with our burial insurance quote tool, to find some of the best burial insurance rates for people in Illinois and abroad!

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