How does a prepayment cremation work?
I am considering a prepayment cremation program through a company named Smart Cremation. The plus is the service is "guaranteed" at the price I pay today even if I pass years from now and there is no attempt to upsell my survivors as is often the case. They say part of the money I pay will be "trusted" to insure the service. Is that true? How do they do that?
I'd be wary of a "prepaid cremation" plan. I have no knowledge of the Smart Cremation company, and make no judgment about it. But no "guarantee" now can insure that any company, including a cremation company, will remain in business years from now. Further, I do not understand the meaning of having a portion of your payment "trusted." Does this mean some of your money would be put in some kind of trust account? If so, what institution would hold the account? Who would have access to the account? Who would be trustee of the account? Would you have access to it? Would you be able to obtain information about it? Finally what percentage of your payment money would be "trusted?"
In sum, I suggest that you do considerable investigation before agreeing to this cremation program. And even if you are assured that most of your money is safely protected by being "trusted," you should take into account that any business can go broke.
Smart Cremation is essentially a twin of Neptune Society (several of the founders are the same), and SC works very much like Neptune: pay up front, "guaranteed" pricing, and the payment is trusted (with the company). With Neptune, 50% of your money is immediately spent to cover Neptune's cost (and commission), with the remainder put into a trust controlled by the company. Anything that you might insist on, such as the type and style of casket, or engraved headstone, may well be delivered immediately to the company warehouse, to be put into storage until you require it, which doesn't leave much room for you to change your mind later. Further, you should certainly check with SC to find out how much of your money is refundable if plans change. It's often recommended that instead of prepayment for funeral services, you set the money aside in a bank account (with a POD -- "pay on death") notation on the ownership description, and let the account accrue interest until needed. That often equals or exceeds the return that you'd receive through the SC trust investment, and certainly leaves all of your options (relocation, vacation, etc.)within your or survivors control. One advantage to the Smart Cremation plan is that it's easily transferrable to any location where SC operates, and they do have a large nationwide presence. Hope this helps....
Use the internet to check for scams, not to say it's foolproof. Googling Smart Cremation I found this link: http://www.funerals.org/newsandalerts/consumer-alerts/89-all-about-neptune
Just a few comments to clarify this question. Firstly, I believe that any entity offering a pre-need agreement/plan MUST be properly licensed in the state they are in. (Check the link I have included below)
Smart Cremation only has about 4-5 locations and they are all west coast, so not much use if you live anywhere else in the US.
Neptune Society is now owned by SCI, which is the largest funeral corporation in the US, so not sure about SC's allegiance here!
Check out this useful link with a state-by-state guide to pre-need funeral contracts: http://assets.aarp.org/rgcenter/consume/d17093_preneed.pdf
There has been controversy about prepaid funeral/cremation plans, so do make sure you thoroughly check out what you are getting, what your refund/transfer options are and what happens to any interest accrued.
My mother-in-law had a prepaid policy which was the kindest act she made for her family. One phone call and everything was done without the emotional decision making stress that accompanies death. She had bought her policy in South Carolina, but died in NC. No problem. The policy fund was either refundable or available in an account for the family to choose a non-member mortuary or allow the policy to provide a member in our area. We chose to have the policy provider make the contact and the service was excellent. I will definitely have a prepaid policy.
my father had pre-paid and purchased a cremation plan thru National Cremation Society in FL in 1996. he purchased basic cremation with no frills, but he did also include transportation costs and transfer fees incase he died outside of the original company's service area. He just passed in June 2014 and i tried to contact Nat'l Crem Soc but they had been bought out several yrs ago by Neptune and the answering office referred me to Neptune, who honored the contract (after purchase 18 yrs ago!) with no additional fees or problems. so my experience was good and now i will be purchasing a plan for my mother.
My husband purchased a prepaid cremation plan and died in 2001. I don't remember who it was through. It was so comforting not to have to go through all that process. The only thing that was extremely concerning and upseting for us was the fact that we had to wait 4 weeks for the cremation. The company said there had been so many deaths at that time that it took a while to get them all cremated. That just didn't sound right to me.
My mom just passed 2/2015 and a prepaid policy which was so sweet as she was, not wanting her family to bare the burden of cost or hassle. We called 10pm at her passing and they took care of everything. We did pay for flowers (she was cremated) for the service. It was a huge help for we were all very emotional. Her policy was paid for in 1991 and if we would of had to pay for it today the cost would have been 8,000.00 more than what she paid. I would recommend it and my husband and I are now researching who we will do it through.
I purchased a policy through a funeral home for my mother. The policy was actually handled like an insurance policy and could have been paid in full or with payments. The policy could be transferred among many different states and funeral homes and the cost was guaranteed not to increase. There were different service levels to choose from. The funeral home handled the transportation from the hospital, the cremation, urn, death certificates, newspaper memorial, and online memorial page for us. We had the policy for just 3 months. When mom passed, the policy arrangements made the end bearable for the whole family. I would say check first with a local funeral home and find out what policies if any are available in your area then make a decision.