Consumers shop for funeral services, but often they are actually buying whole life insurance.
The policies are expensive. And structural features of whole life that have little impact on a long term investor seeking a tax protected savings vehicle, can create problems for a preneed buyer. Although the death benefit is relatively expensive compared to term life, the cost does not typically increase as people age, and consumers do not typically pay more in premium than the death benefit. Preneed whole life policies, on the other hand, are very small and consumers report paying substantially more in premiums than the face value of the policy. She wrote to the company and to the Texas Department of Insurance.