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Burial Trust Funding Presentation

 Traditional Ways of Funeral Funding

1.  Savings Accounts/CDs

  • Your investment is not protected from a long-term care stay
  • Account may be frozen at death.
  • May have a surrender charge at death.
  • Does not avoid probate.
    • Interest earned each year is subject to income tax.
    • Taxes on the interest will hinder ultimate growth.
    • CD accounts are usually held jointly by client and family heirs or funeral directors.
    • Social Services can withhold benefits until customer
      owned assets are reduced to $1,500-$2,000.

2.  Traditional Annuities

  • Applicable state and federal taxes have to be paid at death.
  • Social Services can withhold benefits until assets, including traditional annuities, are reduced to $1,500-$2,000.
  • May not keep up with inflation after taxes.

3.  Traditional Whole Life Insurance

  • Face amount usually fixed (Example: $25,000 is still $25,000, 30 years later).
  • Usually no growth for inflation.
  • Social Services can withhold benefits until assets, including traditional whole life insurance, is reduced to $2,000.
  • Not enough safety or peace of mind.

The Revolutionary Approach to Funding

1.  Advantages of FDLIC’s Decisions Made Early Irrevocable Trust

  • Life insurance benefits may be protected from long-term care stay.
  • Beneficiaries paid face amount plus growth promptly upon death.
  • No surrender charge at death.
  • Excess funds avoid Probate as long as secondary beneficiary is named.
  • Compounded growth rates for inflation protection.
  • Can be used at any funeral home.
  • Client doesn’t have to select funeral merchandise prior to time of need.

2.  Benefits to Your Clients

  • Peace of mind (the number one reason clients pre-fund).
  • Everyone can be covered, regardless of health.
  • Money set aside which has compound interest growth.
  • Irrevocable insurance trust which may be protected from attachment by creditors, such as nursing homes, Medicaid, hospitals, lawyers, and others.
  • Life insurance benefit paid income tax free.
  • The funeral home providing service is paid first, with the balance paid to the secondary beneficiary.
  • Allows the clients to set aside up to $50,000 in this plan.
  • Issue up to age 99.
  • Payment options available, up to 10 years.
  • Compound growth.
  • Dollar-for-dollar payment option in first 12 months.
  • Day one coverage for healthy clients.
  • Step graded benefit plan or annuity for unhealthy clients.

3.  FDLIC Commission Examples - (60 yrs. old with $10,000 policy amount)

  • SINGLE PAY -- $1,000 Advanced Commission
  • 3 PAY -- $1,500 Advanced Commission
  • 5 PAY -- $1,600 Advanced Commission
  • 10 PAY -- $1,500 Advanced Commission\

4.  Simple Claims Process

The funeral director will fax the itemized at-need service charges and a certified copy of the Death Certificate to FDLIC.

FDLIC will first pay the Funeral Home for its services, and then pay the contingent beneficiary any remaining funds.

5.  Increased Death Benefit on Single Pays - (50 years old with $10,000 policy amount)

$10,000 X 1.06383 bump factor

$10,638.38 Face Amount

 3% growth is factored on face amount.