How Funeral Expense Trusts Work
Time-Saving Functionality
Funeral Expense Trusts are designed to solve the access gap within traditional final expense planning. They operate on a quick setup process, irrevocability, and a straightforward claims process.
- No need for death certificate
- Built on a Whole Life Chassis
- Fast claims process
- Irrevocable
Irrevocable
- Secure Segregated Funds: Can only be paid out to the funeral home or to the family members / beneficiaries.
- In the absence of beneficiaries, the deceased’s estate is the default beneficiary.
Whole Life Chassis
- No underwriting
- Fast set-up process: Applications take approximately 5 minutes to set up, and consist of 1 page.
- 100% guaranteed acceptance of clients
Medicaid Eligible
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Due to their irrevocability, FETs are immediately exempt from Medicaid spend-down for long-term care.
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Can also be used to ensure access to government / disability benefits, SSIs, and SNTs.
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Premiums up to state limits ($15,000-$17,500) per policy.
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No cap on the number of individual family member policies.
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Clients can additionally divest upwards of $100,000 to stacked trusts of family members.
How Do Funeral Expense Trusts Work?
First Steps
The first step that an advisor or agent will take with a Funeral Expense Trust is positioning it with clients. The relevance and straightforward benefits of FETs make them easy to integrate into existing or new business.
Built on a Whole Life Chassis
Funeral Expense Trusts are built on a whole life chassis – there is no underwriting, and trusts can be swiftly set up. The application form for a client is a simple 1 page document that takes approximately 5 minutes to fill out. Clients are 100% guaranteed acceptance.
Irrevocable
The irrevocability of Funeral Expense Trusts lends further security and convenience to beneficiaries. The funds can only be paid to funeral homes or beneficiaries. In the absence of beneficiaries, the deceased’s estate becomes the default beneficiary. Also incorporated into irrevocability is the fact that Funeral Expense Trusts are Medicaid eligible.
Medicaid Eligibility
Funeral Expense Trusts are Medicaid eligible, as irrevocability gives the benefit amount immediate exemption from Medicaid spend-down for long-term care. Premiums may reach individual state limits, which range from $15,000-$17,500 per policy. There is no cap on the number of policies allowed for different family members.
The Claims Process for Funeral Homes
Funeral Homes will benefit from the straightforward and prompt advantages of Funeral Expense Trusts. After the funeral home notifies the trust carrier of the owner’s passing, they then complete a claim form that includes the dollar amount for services rendered. No death certificate is required, removing one of the most persistent access gaps in the traditional final expense industry. After the claim form is submitted, the funeral home is paid within 24-48 hours.
The Claims Process for Beneficiaries
Funeral Expense Trusts can immensely relieve beneficiaries of financial burden and logistical hurdles, solving the issue of a lack of timely access within the traditional final expense industry. Once a claim is submitted by the funeral home, the beneficiaries may file. Due to verification from the funeral home, no death certificate is required. Claims are paid within 24-48 hours. Any unused excess funds are payable to the descendant’s estate.
