The mood in the Dismal Trade grew nervous. The NFDA opened a Washington, D.C., office where its liaison spends time trotting around Capitol Hill—to win friends and influence people, in preparation for a possible reopening of the Funeral Rule.
A June 1997 editorial in The Directormight have been written thirty-five years ago but for its let’s-all-buck-up tone; President Maurice Newnam offers this fatherly counsel: “The importance of the memory picture created by the properly embalmed and restored loved one is something we must never lose sight of and never be ashamed to ask permission to do…. Hold your head high, take care in the work you do and be proud to be an embalmer.”
Ron Hast ( Mortuary Management, February 1997) is more candid: “Think about how the public must perceive funeral service as we caress our solid copper caskets, and extol the virtues of embalming and extended preservation. Our critics are gaining attention, and more and more client families come to us with skepticism. In fact, some clients seeking death care service don’t come to us at all.”
19. PAY NOW—DIE POORER
“In the Depression years, every community had a form of preneed,” mused North Dakota funeral director Tom Fisher in a poolside chat with the author in 1995. “In my own community we had the Farmers Union Burial Cooperative Society.”
The early funeral and memorial societies—most of them urban—expressed divergent views on the subject of paying for a funeral in advance. Many societies actively promoted “peace of mind by planning ahead,” negotiating for fixed prices with cooperating mortuaries. Not all were willing to part with their money, however. The societies’ Bulletinwarned: “It always pays to plan ahead. It rarely pays to pay ahead.”
Today, the need to shelter assets for Medicaid eligibility is another reason people pay for their funeral in advance. There are now no federal guidelines limiting the amount that may be set aside for a funeral. Many states—exercising their options as administrators of Medicaid—have set their own limits. Connecticut has set its limit at $4,800; California, $10,000. In New Jersey, the sky’s the limit, and it need hardly be said that this is well known by the vendors of funeral services in that state. A hidden-camera “20/20” investigation captured an undertaker offering to accept $20,000 for a future funeral, assuring the client that any “extra” would be returned to the family.
Funeral directors have a strong motivation to sell ahead of time. Each funeral they have under wraps is one less that will go to a competitor. “A well-run, aggressive preneed program will increase a firm’s market share,” writes Thomas Barnard in the NFDA journal The Director. Given a nationwide proliferation of funeral homes, market share is a driving concern. According to the Funeral and Memorial Societies of America, “If people died Monday through Friday with two weeks off for the mortician’s vacation, the death rate in the U.S. could support 9,288 full-time funeral homes. Yet there are more than 22,000 mortuaries in this country. Many get only one or two funerals a week.”
Do people spend more or less when they plan ahead? Prearranged funerals tend to be much less expensive than those arranged by sorrowing survivors, according to some reports. Howard C. Raether took note of this fact long ago at a National Funeral Directors Association convention. He was discussing an analysis of funeral sales: “If it were possible to tabulate all the prearranged funeral services on record, how do you suppose the average of all of them would compare with the average adult figure shown here?” (Average adult figure means average price of an adult’s funeral.) “Are you ready, willing and able to become part of a program that is going to lower the quality of the average funeral service selected to the point where you will find it difficult if not impossible to stay in business rendering the service you now give?” He added, “It is good for those who survive to have the right and duty to make the funeral arrangements. Making such arrangements, having such responsibilities, is essential. It is part of the grief syndrome, part of the therapy of mourning. It is a positive hook upon which the hat of funeral service is hung. Why should we tear it down by saying the funeral is for the deceased, therefore he or she should make the arrangements?… If funeral directors insist on soliciting pre-need funerals, they are in fact prearranging the funeral of their profession.”
More recent developments in the techniques of pre-need selling, a matter of prime importance to the trade, have proved Mr. Raether’s dour prediction wrong. According to Ron Hast, that knowledgeable sage of the industry, people tend to be more gullible when seated comfortably in their own living rooms. “Pictures of beautifully displayed caskets are far less intimidating when shown to the prospect while sitting on the sofa than when they are presented in a mortuary’s casket selection room…. They start to think of them as quality furniture. They will spend more, not less, on a prearranged casket.”
In any case, those gloom and doom predictions on the impact of prearrangement have long since fallen on deaf ears. By 1995 no less than $20 billion was, according to Consumers Digestsenior editor John Wasik, tied down in prepaid funeral and cemetery plans. That estimate, outsized as it seems, is surely on the low side, because SCI alone today lays claim to holdings of $3.2 billion in prepayments.
Today, it is the corporate chains that are doing some of the most aggressive selling. What do they know that the public does not? And what can be wrong with paying in advance to guarantee prices?
Inflation is the bugbear that is used most effectively by the sellers of prepayment plans. In recent years, however, while inflation has been raising the cost of living generally by 2 to 3 percent annually, funeral costs have been increasing by 6 to 7 percent—which is more than the interest the mortuary is pocketing on your prepaid funeral contract. As the numbers pile up, funeral providers are becoming wary of the trap of the guaranteed price. The Midwestern owner of several funeral homes is quoted in the NFDA organ The Directoras predicting: “Ninety-nine percent of the guaranteed preneeds will be performed at a loss.” Likewise aware of the problem, Funeral Service Insideradvises against guaranteeing prices on future contracts, suggesting the following disclaimer: “If the death benefits are less than the current retail price at the time of death, an additional amount of funds will be due.” With an escape clause like that, you—the consumer—have saved no money with a pre-need arrangement. All you’ve done is paid part of the money in advance, and committed your survivors to pay the funeral director whatever he’s charging at the time of death—eliminating the chance that your nearest and dearest will be free to shop around for a better deal.
If you have already purchased a guaranteed-price plan—which leaves you with the feeling that you’ve got a great deal because the local funeral home will take care of everything—then what?
It’s a situation that invites abuse. The daughter of one Vermont woman, who a few years earlier had paid $3,000 for her funeral, was billed for an additional $1,000 service charge by the funeral home’s new owner.
How else can the undertaker make up for funeral inflation on a prepaid contract? “Cash Advance” items—cost of the obituary (if there is a fee), the death certificate, flowers, or cemetery expenses—will not have been included in your funeral package. An SCI-owned funeral home charged a Denver husband $200 to fax four copies of his wife’s obituary to area newspapers—where the obits ran for free. A New York widow was told, “We’ll take care of everything.” The mortician charged her $175 to have her husband’s date of death inscribed on the existing family monument. Actual cost of the inscription? $75.