Illinois Administrative Code › Title 38 - FINANCIAL INSTITUTIONS › Part 610 - ILLINOIS FUNERAL OR BURIAL FUNDS ACT › Exhibit A - Illinois Consumer Guide to Pre-Need Funeral and Burial Purchases

Current through Register Vol. 48, No. 28, July 12, 2024
ILLINOIS CONSUMER GUIDE TO
				PRE-NEED
FUNERAL AND BURIAL PURCHASES
What Is the Funeral or Burial Funds Act?
The Illinois Funeral or Burial Funds Act [225 ILCS 45 ] (the
				law), gives consumers certain rights and protections when they purchase funeral
				or burial services and merchandise in advance of need (pre-need). The State
				Comptroller has the duty to administer and enforce this law.
What is "Pre-Need" Funeral or Burial
				Purchasing?
The purchase of pre-need funeral or burial merchandise and
				services occurs when you enter into an agreement to acquire and pay for funeral
				or burial merchandise and services before you need them.
What Is a Pre-Need Sales Contract?
A pre-need funeral or burial sales contract is a legal
				agreement between a consumer and a funeral home, or a cemetery (seller) for
				funeral or burial merchandise and services. The merchandise and services will
				be supplied at a future date by a funeral home or a cemetery (provider).
Sellers of Pre-Need Services and Merchandise Must Be
				Licensed.
Sellers of pre-need services and/or merchandise must be
				licensed by the State of Illinois through the Office of the Comptroller. You
				should verify that the person with whom you are doing business is licensed to
				sell pre-need services and merchandise before you make your purchase. You may
				contact the Comptroller's Office to verify whether a seller is licensed.
What Services and Merchandise are Covered by the Funeral
				or Burial Funds Act?
The law covers the purchase of funeral services, clothing,
				caskets, grave boxes, grave liners, burial vaults and urns. Sales of cemetery
				services, such as the preparation of a plot or the placement of a headstone, or
				cemetery merchandise, such as grave markers and mausoleums, are not covered by
				the law. The purchase of cemetery services and merchandise may be covered by
				the Illinois Pre-Need Cemetery Sales Act [815 ILCS 390 ] and Cemetery Care Act
				[760 ILCS 100 ]. If you have any questions about which law applies to your
				purchase, you may contact the Comptroller's Office for assistance.
What Must the Seller Tell You in a Pre-Need
				Contract?
All pre-need contracts sold in Illinois must contain certain
				disclosures to help you the consumer understand your rights. Always check your
				contract for the following information:
* The seller's name and address;
* The provider's name and address;
* When a provider has branch locations, a place in the contract
				where the consumer may select the branch where the funeral or burial will be
				performed;
* The buyer and the beneficiary;
* A complete description of the merchandise and/or services
				purchased;
* Whether the contract is for a guaranteed or non-guaranteed
				price;
* How the merchandise and/or services will be funded (i.e.,
				through a trust account, life insurance policy or annuity);
* The name of the trustee or the insurance provider;
* The governmental body that regulates the trustee or the
				insurance provider; and
* The seller's policy and penalties if the buyer cancels the
				contract or defaults on payment.
What are Guaranteed and Non-Guaranteed
				Contracts?
A "guaranteed contract" means that you are guaranteed the
				services and/or merchandise you selected for the amount of money stated in the
				contract. You or your estate will not be required to pay any additional costs
				for the items guaranteed unless unexpected charges are incurred.
A "non-guaranteed" contract means that the price of the
				services or merchandise you select will be determined at the time they are
				needed. Any payments you make under the contract act like a deposit to reduce
				the out-of-pocket expense at the time of need. If the "deposit" does not cover
				the entire cost of the merchandise or services, you or your estate pay the
				difference at the time of need. If your contract does not guarantee a price, it
				must clearly state "non-guaranteed contract". Be sure to read your contract
				carefully.
Some non-guaranteed price contracts are set up to later become
				guaranteed price contracts. In these cases, the contract must clearly state the
				time or event when the price becomes guaranteed and the nature of the
				guarantee.
Pre-Need Contracts Funded by Life Insurance Policies and
				Annuities vs. Pre-Need Contracts Funded by Trusts.
Under Illinois law, all pre-need contracts must be funded
				through an insurance policy, a tax deferred annuity, or a trust. Your contract
				must clearly state which of these three funding mechanisms applies to
				it.
a.
Life Insurance Policies
			 and Annuities
Pre-need contracts funded by life insurance policies or
				tax-deferred annuities are planning tools offered by insurance companies. The
				contracts may be purchased directly from an insurance company or through a
				licensed insurance agent working on behalf of the funeral home or cemetery. If
				you buy through a licensed insurance agent working on behalf of the funeral
				home or cemetery, any payments you make to the funeral home or cemetery must be
				mailed to the insurance company within 30 days after receipt of the
				contract.
Your insurance policy will provide the details of the coverage,
				including the cost, payout provisions and cancellation fees. Be sure to read
				both the contract and the insurance policy carefully.
b.
Trust Accounts
When funeral homes or cemeteries sell pre-need contracts funded
				by a trust, the seller must send a certain percentage of your payments to a
				trustee for deposit in a trust account. The trustee is an independent company
				that must hold this money until the merchandise or services are actually needed
				(or until you cancel your contract and seek a refund). Review your contract for
				the name of the trustee and the trustee's contact information.
Sellers must send 85% of the purchase price of outer burial
				containers (burial vaults) and 95% of the purchase price of all other
				merchandise and services to the trustee within 30 days after receipt of the
				contract. Each year you will receive a trust account statement (much like a
				bank account statement) from the trustee. This is an important consumer
				protection, so be sure to watch for your annual statement. If you do not
				receive an annual statement, contact the trustee named on your contract. If the
				trustee cannot be located or cannot assist you, contact the Comptroller.
Can I Get My Money Back If I Change My
				Mind?
Yes, unless a pre-need contract is made irrevocable, you may
				cancel at any time. The penalties for cancelling a pre-need contract will be
				different depending upon when the contract is cancelled and the funding method
				used.
a.
Contracts Sold Outside
			 the Seller's Place of Business
If you did not purchase your contract at the seller's place of
				business, including but not limited to door-to-door sales, then the contract is
				subject to the Federal Trade Commission's "Cooling-Off Period for Door-to-Door
				Sales" rule. Under this rule, you have the right to cancel the contract within
				three business days after signing it without any penalty.
b.
Paid in Full Contracts Cancelled
			 Before the Time of Need
If you cancel a contract for services or merchandise funded by
				a trust after it is paid in full but before the time of need, the seller must
				refund 95% of the purchase price plus net earnings. For contracts for outer
				burial containers funded by a trust, the seller must refund 85% of the purchase
				price plus net earnings.
If you cancel a contract funded by an insurance policy or
				annuity, you are entitled to the cash surrender value of the insurance policy
				or annuity. (Cancellation of an insurance policy does not necessarily cancel
				the pre-need contract.)
c.
Paid in Full Contracts Cancelled After the Time of Need
If a contract is paid in full but it is decided at the time of
				need that the funeral or burial will be held elsewhere or that the merchandise
				or services will not be used, the seller may keep 10% of the payments made
				under the contract or $300, whichever is less. The remainder of the trust funds
				or insurance or annuity proceeds will be provided to the legal heirs or
				according to a probate action.
d.
Partially Paid Contracts
If you cancel before your contract is paid in full or if you
				default on payments, the seller may keep 25% of the payments made under the
				contract or $300, whichever is less.
The Illinois Pre-Need Funeral Consumer Protection
				Fund
If you are not provided the funeral or burial merchandise
				promised in the contract and are not provided a refund, you or your estate may
				be able to recover your losses from the State's Pre-need Funeral Consumer
				Protection Fund. Contact the Comptroller's Office to apply for consumer
				protection funds.
What Can You Do If You Believe You Were Treated
				Unfairly?
If you think that you have been a victim of unfair or illegal
				practices in the handling of pre-need funds, you may file a written complaint
				with the Office of the Comptroller, Pre-Need Licensing and Certification
				Enforcement (PLACE) Division, James R. Thompson Center, Suite 15-500, 100 West
				Randolph Street, Chicago, Illinois 60601. In addition, the State Attorney
				General can seek a court order for restitution and issuance of fines. If you
				believe that improprieties exist in connection with the sale of insurance or
				annuities used to fund a pre-need contract, you can file a complaint with the
				Illinois Department of Insurance, 320 West Washington, Floor 4, Springfield,
				Illinois 62767.
Questions or Concerns?
If you have questions or concerns about your pre-need contract,
				please call the Comptroller's toll-free consumer hotline at (877)203-3401; mail
				your inquiry to the Illinois Office of the Comptroller, PLACE Division, 100
				West Randolph Street, Suite 15-500, Chicago, Illinois 60601; or visit our PLACE
				webpage at
http://www.ioc.state.il.us/office/place/
.