Florida Administrative Code › 69 - DEPARTMENT OF FINANCIAL SERVICES › 69K - Division of Funeral, Cemetery, and Consumer Services › Chapter 69K-8 - CONTRACTS › Section 69K-8.005 - Preneed Contracts Funded by Life Insurance

Current through Reg. 50, No. 138; July 16, 2024
(1) A preneed contract may be funded by a
				life insurance policy payable upon death of the preneed contract beneficiary,
				provided that no such policy may be sold if its maturity value is less than the
				amount of the services, merchandise or burial rights to be provided under the
				preneed contract. For purposes of this rule, maturity value shall mean the
				amount payable on the policy when all premiums for the policy have been paid,
				or all conditions for full payment of the policy amount have been met, and must
				at least equal the cost to the preneed purchaser of the services, merchandise,
				or burial rights established at the time the preneed contract is
				executed.
(2) Preneed contracts
				funded by life insurance may be sold only by persons holding a valid preneed
				license pursuant to section
				 497.452, F.S.
(3) Any insurance policy used to fund a
				preneed contract must be sold in a manner that complies with section
				 626.785, F.S.
(4) All preneed contracts funded by insurance
				must meet the requirements of section
				 497.282, F.S., and with regard
				to section  497.282(8),
				F.S., the contract must contain the following provisions:
(a) Disclosure of the purchase price,
				itemized to reflect the specific costs allocated to each service, cash advance
				or merchandise purchased. Where applicable, merchandise specifications shall be
				included;
(b) Disclosure that a
				life insurance policy has been purchased to fund the monies needed for some or
				all of the purchase price and will be used to fund the contract at the time of
				the purchaser's death in one of the following ways:
1. The life insurance policy proceeds will
				constitute the full payment for the contract purchase price at purchaser's
				death; or
2. Where the insurance
				will constitute only a portion of the full payment for the purchase price at
				purchaser's death, the contract shall clearly disclose that the purchaser has
				an obligation to pay the difference between the proceeds of the life insurance
				and the purchase price of the prearranged funeral.
(c) A clear disclosure that no funds are
				being paid into trust under the preneed contract and that the funding of the
				contract is through the payment of premiums to purchase life
				insurance;
(d) What penalties will
				occur in the event purchaser fails to make premium payments on the funding
				insurance policy;
(e) A clear
				disclosure of the impact upon the preneed contract and any penalty to be
				incurred or monies to be received as a result of cancellation or surrender of
				the life insurance policy;
(f) That
				all purchasers are entitled to terminate or cancel their preneed contract at
				any time and that all purchasers are entitled to terminate or cancel the
				funding insurance policy within 30 days of purchase and receive a full refund
				of all monies paid for the contract or funding insurance policy;
(g) The following statement in bold print:
				The Board of Funeral, Cemetery, and Consumer Services regulates preneed
				contracts in Florida. Should you have a complaint, you should contact the Board
				at the Division of Funeral, Cemetery, and Services, 200 East Gaines Street,
				Tallahassee, Florida 32399-0361 or by calling
				1(800)323-2627.