Before you offer funeral financing to individuals, it is important to verify their life insurance policy to ensure money will be available. Without the insurance verification process, it can be risky for a funeral home or other facility to provide funeral funding to families. Just because an individual had a life insurance policy doesn’t mean it will be accessible when it is time to pay it out. Therefore, you need to know what to look for so you can feel more confident offering your clients’ funeral finance options.

The Top Three Problems

The first step in the insurance verification process is to look for one of the top three problems. Each of these problems can have a negative impact on whether you will be paid after the funeral funding is completed. The three questions a funeral financing company should ask include:

1. Have the premiums been paid on the insurance policy?
2. Is the insurance policy contestable?
3. Are there any liens or loans taken out against the policy?

If the premiums have not been paid, the policy is contestable. If there are liens or loans against the policy, allowing the family access to funeral finance options is a riskier venture. A funeral funding company can track down the answers for you, saving your company time and money.

Funeral Financing Safeguards

Funeral funding companies offer many advantages that funeral homes and other facilities can’t provide on their own due to time restrictions and staffing concerns. These companies have safeguards in place that provide an effective insurance verification process. Safeguards include:

• A Tracking System – This system follows accounts through every step of the process so you can see what is happening and what will happen next.
• CPA – A funeral finance company with an on-staff CPA offers additional safeguards. CPAs are often familiar with insurance companies and can help the financing company make the right decisions.
• An Attorney – Another great asset of a funeral financing company is one that has an attorney working directly for them. This attorney can assist with any legal issues, especially those regarding collection.

What Is Non-Recourse?

One concern many funeral homes and other similar facilities have is what will happen if the insurance company doesn’t pay out the funds to the funeral funding company. If you aren’t careful about the company you choose, you could be held liable to pay back this amount. For this reason, it is critical to choose a funeral finance company that offers non-recourse funding. With this type of funding, you will not be responsible if the insurance company doesn’t pay out the promised amount.

As you consider your options in funeral funding, it is important to understand why working with a funeral finance company is your best option. These companies have the right safeguards in place and know what to look for to ensure payments are made through the individual’s insurance policy. Without a funeral financing company, this can be a risky and time-consuming endeavor.

If you are interested in working with a company on your funeral funding needs, contact us for more information. Mortuary Financial Services features all the funeral financing safeguards, as well as non-recourse funding.