Many of the usual provisions of Burial Plans in other states are relaxed in Pennsylvania. This is not to say Pennsylvania allows criminal activity.
The laws surrounding a prepaid burial are more generous to the consumer, than in other states and allows for the funeral director to offer many different types of arrangements, under the pre-need agreement, that is regulated under Pennsylvania contract law, rather than by the funeral services office.
The State Board of Funeral Directors is the governing body for the funeral services industry in Pennsylvania. The board regulates licenses and practices of funeral directors and their staff.
The board makes the regulations and rules governing the conduct and provisions made by funeral directors for the disposition of human remains. Regulations include:
All regulated burial plans must be approved by the board, and meet the requirements of the board’s regulations.
In this way, there can be more open lines of provisions as well as more options for the purchaser.
The trust that is entered into keeps all the parties contracted in the plan honest to the terms that are agreed upon.
To get started let’s look at exactly what is burial insurance, what is a burial plan, and how those two contracts differ.
Why is Burial Insurance Important?
Today, everything is more expensive than ever before. In Georgi, a funeral can cost $4,500 without cemetery fees, in places like Washington DC it is more like $10,000 before cemetery fees.
More than ever before funeral costs must be handled before the death, so that survivors aren’t left holding an expensive bag.
Burial or cremation in and of itself can cost thousands, that’s not including the arrangements, viewing, or caskets. While many states don’t require a casket, many cemeteries have container regulations, as do crematoriums.
Survivors can be stuck with those immediate costs and they can run very high, even for the basics. Due to the high cost, and immediacy of those costs, it is often a good option to have burial insurance long before death comes knocking on the door…
What is Burial Life Insurance?
In most states, Pennsylvania included, burial life insurance is a low face value whole life insurance policy that is perpetual.
The premium, once locked in, never goes up and the face value never decreases. The policy builds a cash value internally, that the insured can borrow against.
The policy, if paid every month, will last until the death of the insured, at which time the death benefit is paid to the beneficiaries.
This type of life insurance is often bought for multiple people, like an entire family, with a small face value on spouse and children.
The cost can be picked up by the children when they turn 18 and they can become the policyholder outright. Such insurance allows for the unpredictable nature of life in general, and allows for accidental death also.
Should You Prepay Your Funeral?
Pennsylvania is also a state where prepaid funeral arrangements are regulated. As the Baby Boomers reach their 70’s it has become apparent that many people can’t afford the large payouts funerals can carry.
Prepaid funerals are a popular way to defer the large payout accompanying a funeral. The question becomes more of “how can I do this?” than “should I do this?”
It is becoming more and more an option to prepay burial expenses to lighten the load on the survivors and reduce overall costs for a financial event that is imminent.
While prepaying can be helpful, and emotionally satisfying, there are pitfalls.
Some of the negative aspects can be:
That is why prepaid funeral, burial, or cremation is regulated by the state.
What is Included in a Prepaid Burial Service in Pennsylvania?
The state does not have a cap on funeral expenses that can be prepaid. So just about any kind of product or service purchased for a the purpose of the internment of the dead.
Some of the products and services that can be bought in advance for a funeral or burial, include:
How Much Does it Cost?
When choosing the way your remains will be treated after death, it is good to divide them into burial or cremation.
In Pennsylvania, the average for a burial is $7,181.
That cost includes:
The cost of burial insurance can run anywhere from $15.00 – $30.00 per month for up to ten years. The plan is fully funded after its final payment is made in good standing.
The plan should be held bythe trust fund, and that fund should be completely separate from the company who will receive the funds upon the death of the plan holder.
In Pennsylvania, a cremation can cost anywhere from $500 – $3,000 and include a whole host of options.
With most crematoriums the price is much more reasonable so people opt for a more involved funerary arrangement.
With a cremation, you can have a simple or a full service cremation.
Most cremations include:
The cost of a cremation with a full service can be between $12.00 and $25.00 for a total of ten years.
This type of prepaid plan should also be held in a trust fund for the purchaser with the funeral home or cemetery only getting paid upon the delivery of the goods and services provided for in the plan.
What Prepaid Burial Plans in Pennsylvania Offer
The prepaid, or pre-need burial plan in Pennsylvania must have a contract with very transparent provisions and terms. The contract must be made by a registered and licensed funeral director or their sponsored sales agent.
The purchaser has the option to choose a burial life insurance plan, that is held in trust to a certain funeral home or cemetery. This can be a far more secure way to enter into a prepaid plan that is guaranteed to be applicable when the purchaser dies.
In Pennsylvania, you do not have to have a funeral director handle the final arrangements. Family members can handle the final disposition of the deceased. There are certain steps that need to be followed, but if there is only a small burial plan, then the funeral can be at home.
The law states that the body of a deceased person must be either embalmed, refrigerated, if not embalmed or refrigerated then the remains must be buried or cremated 24 hours after death.
What Are the Regulations?
The state of Pennsylvania has less regulations concerning prepaid or pre-need burial plans than other states.
The Pennsylvania State Board of Funeral Directors handles many of the regulatory functions and compliance issues concerning prepaid burial plans.
Some of the regulations surrounding pre-need burial contracts include:
What Are the Tax Implications?
When the burial plan contract is signed and the money is deposited in the account it remains there tax free for the entire time it is in escrow in the trust. Once the purchaser dies and the funeral plan contract is completed tax will be levied for the goods and services provided.
Many times the tax is prepaid, and that is recorded also in the originating contract. That payment must be recorded and reported to the board, with the other reports made the board.
Although there are few laws and regulations in the Pennsylvania Code, the State Board of Funeral Directors carries the governess of the funeral industry.
Those regulations and rules of conduct must be followed at all times and with due diligence. This actually allows purchasers more freedom of choice in planning and prepaying their funerals and offering peace of mind when dealing with this often hard to face eventuality.
People Often Ask
What is a pre need burial contract?
The pre-need burial contract is a legal financial instrument entered into by a purchaser and a funeral director. In Pennsylvania that director must be licensed and report the contract directly to the State Board of Funeral Directors for approval.
The purchaser makes his or her funeral arrangements in advance and pays for those goods and services before their death. The funds for this type of contract are held in escrow and can not be used or applied to anything other than the purchasers funeral.
What is a prepaid funeral contract?
While a pre-need burial contract and a prepaid funeral contract are for the most part the same – and a savvy consumer can make them very similar – a prepaid funeral contract does not have to be held in trust for the purchaser.
A prepaid funeral plan can be paid directly to a third party held in perpetuity until the purchaser dies. This is a very risky way to prepay a funeral. There should always be an escrow of the funds paid into the account, held in trust with life insurance or with a contract in trust.
Is embalming required by law in Pennsylvania?
While embalming is not required, human remains must be embalmed, refrigerated, or interred within 24 hours of death.
Finding the Best Burial Insurance Plans in Pennsylvania
Overall, prepaid funeral plans are a great way to provide for your family in the event of your death, and help alleviate some of the unexpected financial burden associated with your death.
Due to the nature of these policies, each institution will have their own rates and coverage options.
To be sure that you are getting the best insurance policy to protect your loved ones, you should compare burial insurance rates in Pennsylvania with your prepaid funeral insurance plan before making a decision.
Speaking with a professional is always highly recommended when it comes to this, as they can easily help you navigate through coverage options that are available to you, to help find the best burial insurance coverage for your loved ones.
Give our independent life insurance agents a call today, and they can help you compare burial insurance rates from dozens of the best burial insurance companeis on the market, in order to find the best policy for you.
Or, get started quickly online, by using our burial insurance quote tool to compare burial insurance rates quick and easy.