Consumer Payments on Pre-need Services and Merchandise Must be Placed in a Trust Account
When you purchase pre-need services and merchandise, the seller must place a certain percentage of the costs of the purchase price in a trust account to ensure delivery at the time of need; 95% of the purchase price of all services and merchandise and 85% of the purchase price of outer burial containers (burial vaults) must be placed into trust.
May I Fund a Pre-Need Arrangement With a Life Insurance Policy or Annuity?
Yes, under Illinois law a pre-need contract may be funded through an insurance policy or tax deferred annuity. The insurance policy or annuity may or may not be sold in connection with a commitment from a licensed funeral establishment or cemetery to provide you with specific services and/or merchandise. If there is no provider of funeral services and/or merchandise, this fact must be disclosed in your contract. Without a provider you may only be purchasing insurance coverage providing a payout of a certain amount, and not entering into an actual pre-nned contract that guarantees the actual provision and price for the services and/or merchandise. Be sure to read your contract or insurance policy carefully.
Can I Get My Money Back If I Change My Mind?
Yes, depending on the circumstances. The penalties for canceling a pre-need contract will be different depending upon when the contract is canceled. If a pre-need contract is subject to the Federal Trade Commission (FTC) three-day cancellation rule (which applies to door-to-door sales or other sales made at a place other than the seller's place of business) you may cancel the contract within three business days after it is signed without any penalty.
If a pre-need contract is funded by an insurance policy, Illinois law allows you to cancel the insurance policy within 30 days without penalty. Cancellation of an insurance policy does not necessarily serve to cancel the pre-need contract. After 30 days you are entitled to the accrued "cash surrender value" of the policy upon cancellation.
Unless made irrevocable, you may cancel a pre-need contract at any time. If cancellation occurs as a result of your default on payments, the seller is permitted to retain the lesser of 25% of the sales proceeds or $300.
The seller cannot otherwise cancel the contract. If you cancel the contract after it is paid in full, the seller may retain the lesser of 10% of the sales proceeds or $300.
What Can I Do if I Believe I am Treated Unfairly?
If you think that you have been a victim of unfair or illegal practices in the handling of pre-need funds, you may file a written complaint with the Office of the Comptroller, Department of Cemetery Care and Burial Trust, James R. Thompson Center, Suite 15-500, 100 West Randolph Street, Chicago, Illinois 60601, (312) 814-5921. In addition, the State Attorney General can seek a court order for restitution and issuance of fines. If you believe that improprieties exist in connection with the sale of insurance used to fund a pre-need contract, you can file a complaint with the Illinois Department of Insurance, 320 West Washington, Floor 4, Springfield, Illinois 62767.
For more information on anything contained in this consumer guide, contact:
Office of the Comptroller - State of Illinois
100 W. Randolph Street
Suite 15-500
Chicago, IL 60601
Comptroller's Cemetery Care Consumer Hotline:877-203-3401 (toll-free)
E-Mail: ccbt@mail.ioc.state.il.us
For more information on preplanning or prepaying, see your local cemetery or funeral director or:
Illinois Funeral Director's Association
215 South Grand Avenue West
Springfield, Illinois 62704
(800) 240-4332
(217) 525-2000;
Funeral Directors Services Association
499 Northgate Parkway
Wheeling, Illinois 60090-2646
(847) 808-7500
Illinois Cemetery and Funeral Home Association
808 Osage Street
Normal, Illinois 61761
309-454-8797
Cook County Association of Funeral Home Owners, Inc.
4114 South Michigan Avenue
Chicago, Illinois 60653
773-624-2703
Alliance of Illinois Cemeterians
1441 Monument Avenue
Springfield, Illinois 62702
217-789-2340
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