If making arrangements for your end-of-life has been on your mind, you are probably not alone. These arrangements may not be easy to make for many of us because there are so many aspects to consider. One thing you may want to think about is whether you will pre-arrange your funeral service and how to pay for it. There are a variety of options and in this blog post, we will explain the differences between a preneed contract and life insurance.
Preneed Contract:
A preneed cemetery services or funeral services contract is a future performance contract that provides for cemetery or funeral services. This type of contract is arranged while the person is alive and are regulated in BC under the Business Practices and Consumer Protection Act, the Cremation, Interment and Funeral Services Act and the Consumer Contracts Regulation.
Preneed Contract (cash, up-front)
With this type of preneed contract, you pre-arrange for your end-of-life goods and services. You may pay up-front for the arrangements and the funeral services provider of your choice must put 80% of the money in trust within 30 days of signing the contract until the funds are needed.
A preneed cemetery or funeral services contract may be cancelled at any time by the purchaser or by the personal representative of the deceased; however, you may lose up to 20% of the total cost of the contract. Be aware that items that are personalized or unique may not be refundable.
There is more to know about these types of arrangements so we encourage you to do your research. You can also find out more about your preneed cemetery or funeral services contract rights in this blog post.
Preneed Contract (insurance)
While Consumer Protection BC is not responsible for regulating this part of preneed contracts, preneed insurance is also available as an option. With this type of insurance, you are buying insurance specifically for cemetery or funeral related goods and services. You may make monthly payments for this insurance.
Life Insurance:
Life insurance provides a financial payment to your beneficiary upon your death. When you buy a life insurance policy, your estate is the beneficiary. The insurance company pays the amount of your insurance to the beneficiary after your death which then may be used for paying for your cemetery or funeral services. Consumer Protection BC does not have any oversight over life insurance, however information can be found on the Financial Consumer Agency of Canada website.
General Tips:
Of course you can also choose to save the money yourself to cover your end of life arrangements. The decision is yours. Whichever option you decide to go with, here are some tips when making end-of-life arrangements:
Tip 1: Ensure you understand what you are signing. Whether it’s a preneed contract or life insurance, there is a lot to learn so do your research. You may also want to ask your friends and family to hear about their experiences.
Tip 2: Find out about your cancellation rights. Always read all the fine print in the contract and in particular, the cancellation terms.
Tip 3: Ask questions of the business or insurance provider. If you are unsure about something, don’t hesitate to ask or visit several businesses to make the decision for you and your loved ones.
Tip 4: Tell your loved ones what plans you have made and where your paperwork is located.
Funeral directors, providers and embalmers as well as cemetery and crematorium operators are required to be licensed with Consumer Protection BC. To find a licensed provider please visit this page on our website.
We hope you find information in this blog helpful and you are on your way to making the right decision whatever that may be for you. For more information about BC’s funeral services, explore our blog on this topic.
ADDITIONAL READING:
Your preneed cemetery or funeral services contract rights
Preparing now for later
Writing your will
Have you had “The Talk?” Top 5 things you need to know about funeral services
In 2012 I pre-paid my funeral and burial costs with a cemetery in Victoria. It cost me slightly over $10,000 including the HST. I have since decided I do not wish to be buried in Victoria and want to cancel the contract. I was advised today by email that I would have to sell the interment Rights myself (which I paid $4500 for) and that a Memorial Bronze that cost $2425 would have to be taken by me and be melted down for whatever cost that was. In reading information on your website, as well as the cancellation policy on the agreement, I understand I should be able to get approximately 80% of the costs back. Can you enlighten me, please and thanks very much.
Hello Michele, thank you for reaching out to us. I think that I would prefer to have you call us so that we can hear from you and have a conversation about your experience. Our number is 1-888-564-9963. Thank you!
I like this blog it’s a master piece! Glad I discovered this on google.
We are dealing with a funeral home in Surrey,bc. My dads health is failing. So i contacted them. My parent purchased a niche and cremation duo in 2009. Now I speak to the funeral home they say that my parents only payed half and part of it. My mom remembers paying a specific amount to them. The credit union that the cheque was written on only keeps records for 7 years. The funeral home changed over their computer systems around 2012 and manually put in everyone contracts. We believe it was not done and we dont know what to do. They are requesting another $4800 for my dad. And another when my mom passes. Can you help.
Hi Patti, we are sorry to hear that your Dad is not well. We would like to get more details from you about this situation – would you be able to fill out our official complaint form so we can take a look at it closer? Here’s a link to get started. Thank you.
I am perplexed by the attachment by (Rainforest Funeral and Cremation Services Ltd) a pre-arranged Insurance for monthly payments. I do not want such a contract- but only to make a payment in full for a basic cremation for me and my spouse. I do not want any insurance ‘deal’.
Hi Anton, while we are not responsible for this part of preneed contracts, please feel free to give us a call at 1.888.564.9963 and we will try to answer any questions that you may have.
Why do they have to make it so complicated ?
I recently contacted a funeral home to find out about prepaid funeral arrangements. I want absolutely basic, nothing extra or fancy. They seemed to understand that but the draft document I got back was 11 pages long !!! With all kinds of jargon and legalese ! In part be use of my visual impairment I am not sure what it all means and if I want to sign all the things they want me to.
Is there no way to make them make it simple ???
Thank you
Hi Susanne, we have written a blog post about different options when it comes to end-of-life options. You may find the information useful as it outlines various options. Here is the link to the post. We hope it’s helpful!
We just purchased a Preneed service for my wife and myself. The contract does not show the rate of interest nor the total amount of interest charged over the 3 year term. I believe all term contracts require this breakdown. Am I correct? The amount of interest we were told we would pay does not agree with the Total of the 36 monthly payments to be made.
Hi Dave, thank you for contacting us. We would like to get more details from you and take a look at your contract. Would you be able to contact us with that information? Thank you!
My wife and I have decided after reviewing this contract that we will be it cancelling as per their FREE LOOK stipulation.
in 2006 my father in law passed away, was cremated and put in a double vault. My mother in law prepaid so that the funeral/ cemetary would open that double vault and place her ashes in the same vault. A head stone plaque was paid for with his name and information and her name . Now that she has passed we contacted the funeral home/cemetary to make arrangements for her interment into that vault and now have been told that they have changed rules and she must now have her own vault (must be purchased) a new plaque (must be purchased even though her name is on the one above. This is not what was planned and purchased by his wife. Is this a true NEW LAW or is the funeral home/ cemetary just making up the rules
Hi Sandra, thanks for reaching out to us. Cemeteries have their own set of bylaws and rules they follow, so this could be a situation where their bylaws may have changed. We do need some more information from you to assess the situation so please submit a complaint using our form.
Hi Sandra, thanks for reaching out to us. Cemeteries have their own set of bylaws and rules they follow, so this could be a situation where their bylaws may have changed. We do need some more information from you to assess the situation so please submit a complaint using our form.
You say that there is more information available on pre-need contract life insurance at the Financial Consumer Agency of Canada website, i clicked, went there and looked all over and can find nothing.
I want to know if the policy pays out fully to the funeral home or the surviving spouse, is it almost immediate or some time after death ?
Hey John, thanks for your question. If you can’t find what you’re looking for on their website, I would suggest reaching out to the Financial Consumer Agency of Canada directly with your question, as this isn’t an area we oversee. I hope this helps!
Hey John, thanks for your question. If you can’t find what you’re looking for on their website, I would suggest reaching out to the Financial Consumer Agency of Canada directly with your question, as this isn’t an area we oversee. I hope this helps!