Turnkey Death Planning Programs May Work In The U.S.
Those of us with aged parents (and perhaps even those of us who are not getting any younger ourselves) are haunted by the specter of what to do at time of death.
Regardless of an individuals financial circumstances, the mere logistics of dealing with death are daunting.
For those with limited financial circumstances, the costs of a funeral can be disastrous–particularly at a time of emotional turmoil when good judgment may be adversely affected.
The life insurance industry has had funeral and “pre-need” insurance for decades. This is designed to help cope with the financial burdens of funeral and burial or cremation.
Religious institutions sometimes help pre-arrange the end-of-life details, too. And many funeral homes will work with individuals and families to do the same thing.
However, the ability to have the planning done with professional help, by someone with no stake in the sale of products or services attendant to funerals and final disposition, can help to achieve the result of a reasonable and dignified passing.
Everyone has heard horror stories of unscrupulous undertakers preying on survivors after the death of a loved one. This makes many consumers reluctant even to think about pre-arranging what will happen at that time, let alone to take steps to act on it.
Anyone who has ever sold a life insurance policy knows that. Unfortunately, life insurance professionals also know the sad truth: Even with the assistance of the most honorable of funeral directors, handling final affairs for a deceased loved one can result in expensive and painful missteps.
Now, a new program weve observed in Canada is attempting to help with this difficult juncture. The program is like many of the pre-planned programs that exist in the United States, but with one significant difference: It integrates all the final planning pieces into one package.
This package includes not only life insurance (to cover funeral and burial or cremation expenses) but also a type of “concierge” service arranged in advance to ensure proper handling of logistics when the inevitable occurs.
The program includes education, information and professional counselors prior to death; choice of ones own mortician, burial location, and method of final disposition of remains; and ability to make changes in the plan up to time of death. The critical element is that it provides a decision process that, when recorded, takes the guesswork out of the funeral process.
In this manner, missteps can be avoided at the time of emotional distress because all decisions were made and arrangements put in place well in advance of when needed.
We bring this up here because the integrated approach may go a long way toward helping people start thinking about their final day now. By combining all the elements into a program that allows choice and leaves control in the hands of the client, such programs may take away some of the negativity that people have about making their final arrangements.
This resonates strongly with the life insurance message–that it is wise to make important decisions well in advance of death. It also resonates with the flexibility messages that are central to so many life insurance products todaythat is, you can choose and you can make changes after you choose.
As the various players in the U.S. market expand their own end-of-life programs, we would not be surprised to see a similar integration occurring here. In fact, we think the life insurance industry might do well to spearhead moves in this direction.
Why? Such programs tend to validate the entire life insurance process. In addition, they have strong potential to serve as a lead generator for more comprehensive forms of life insurance coverage. Obviously, people who have explored the need for funeral planning also are candidates for fuller forms of life insurance protection.
Such programs also can help insurers promote persistency among holders of life and annuity policies and with other types of financial services. This is a time when insurers are scrambling to keep business in force. Offering this type of service to existing policyholderswith or without the additional life insurance includedcould help accomplish that goal.
The program appears to have achieved wide acceptance in Canada, where it is used primarily with affinity groups. An important element is a specially designed life policy that permits immediate payment of proceeds upon notification of death without the usual delays attendant to obtaining death certificates, etc. This enables beneficiaries to use the proceeds to pay final expenses at time incurred, without having to dip into other funds while waiting for death benefits from traditional types of policies.
None of us want our inevitable passing to be any more of a trial for our loved ones than is natural for the event. We believe a turnkey approach to final planning is long overdue in this country. For those of us with the potential for funerals of aged parents or of ourselves in our immediate future, these programs could provide some much needed peace of mind.
Norse N. Blazzard, JD, CLU, and Judith A. Hasenauer, JD, CLU, are attorneys in the Pompano Beach, Fla., office of Blazzard, Grodd & Hasenauer, P. C., You can e-mail them at: Norse.Blazzard@bghpc.com.
Reproduced from National Underwriter Life & Health/Financial Services Edition, December 5, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.