Utah Insurance License Number: 88816
Pre-Need Sales Agent Number: 325672-5802
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Why Single Payment/Early Payoff Funeral Plans Are the Best Place For Your Money, Even If You Don't Select A Funeral Home
After more than 25 years of selling pre-paid burials and funerals, I have the proof that paying for a funeral with one check as far in advance as possible is one of the best investments a middle-aged or older person can make. But it must be done correctly or the intended benefits won't outweigh the consequences of choosing the wrong vehicle or wrong funeral home. Below are guidelines for making a single sum investment into a funeral plan funded by insurance work for you, as well as early payoffs.
Funeral Home Survey
(These packages are WITHOUT a casket, burial vault, obituary, grave opening, etc. This is for a full traditional funeral service only).
How NGL's Early Payoff Works - Click Here For Details
Funeral homes sell funeral plans that can be funded through either 1) a trust fund they maintain within their company where your money is safely separated from all their other funds and can't be co-mingled with their other funds, or 2) an insurance policy for that purpose. The second option is far more common.
If you consider purchasing a funeral plan from a funeral home that offers the trust option as well as the insurance option, you can avoid paying any interest or finance charges that are normally associated with these types of trusts with a single payment or some other time period they allow "interest free," such as one year.
But keep in mind that buying a funeral plan on a trust maintained by the funeral home "locks up" your money with a penalty to pay if you decide to use the money elsewhere. Your money is trapped with that funeral home. The penalty to get it back can be quite steep, such as 20-25%. This reason alone makes private funeral home trusts the worst of purchasing options. The only viable and sensible reason to purchase a funeral plan through the private trust option is that it allows you to use the funeral plan for anyone, not just a specific person as with an insurance-funded plan. Often folks can only afford one plan at a given time, and they want to be able to use it for "whoever goes first." This makes sense, but it is the only real benefit to using the private trust option (except for having costs guaranteed).
The NGL Funeral Expense Trust offers a discount for making a single payment. This discount is based on your age and health, two factors that determine how long you will live. Generally, the younger you are, the bigger the single payment discount will be. For example, I've written numerous plans funded through National Guardian Life that give you a discount of 12% up to age 55. That's an automatic "return on investment" of 12%. If your plan has a death benefit or "face amount" of, say, $5,000.00, you only have to write a check for $4,400.00 to get a plan worth $5,000.00. And the cash value will also grow thereafter as long as you are alive. The discounts go down as you get older, of course. So buying a funeral plan this way pays better if you buy it when you are relatively younger.
This is the best deal of all-everything considered. The discount is a return of your investment along with the cash value growth-and all of it is tax-free. If you are able to get such a discount and can swing it, consider transferring money from CD's, savings bonds, other insurance with cash value sufficient to pay for it, or with money from other sources or savings.
All plans are guaranteed portable, including cash value growth as long as you're alive. Even though you may have designed your plan around the prices of one particular funeral home, the funds can be used at another that charges similarly or less so you get the same result if your plans change. In any case, your money is never stuck with a funeral home where you have to pay a penalty for withdrawing that money. You don't have to worry about getting any money back from a funeral home, because your money is safely deposited with a large insurance company. And no current or past health condition can disqualify you from the insurance plan.
If you need more than just funeral money:
This agency only works with local, privately-owned funeral homes. This means you will be dealing with a trusted member of your community, not some distant corporation only worried about a bottom line.