What must a pre-need agreement clearly state regarding funds?

What must a pre-need agreement clearly state regarding funds?

• A. Funds are refundable
• B. Funds are non-refundable
• C. Funds can be transferred
• D. Funds are subject to interest

Answer: (B)

A pre-need agreement must clearly state that funds are non-refundable to ensure transparency and protect the interests of both parties involved in the arrangement. This stipulation is essential because it informs the consumer that once they have committed their funds to a pre-need plan, those funds cannot be reclaimed, which helps in planning and managing the financial aspects of funeral services. By clearly articulating this aspect of the agreement, it helps to set appropriate expectations for consumers regarding their investment in pre-need funeral services. It is crucial for consumers to understand the implications of committing their funds, as this investment is intended for services rendered at the time of need. While aspects such as the transferability of funds, potential interest accumulation, and refundability are relevant considerations in pre-need contracts, the primary focus here is on the non-refundability, which serves as a fundamental principle in the integrity of such agreements in Tennessee.

A pre-need agreement must clearly state that funds are non-refundable to ensure transparency and protect the interests of both parties involved in the arrangement. This stipulation is essential because it informs the consumer that once they have committed their funds to a pre-need plan, those funds cannot be reclaimed, which helps in planning and managing the financial aspects of funeral services.

By clearly articulating this aspect of the agreement, it helps to set appropriate expectations for consumers regarding their investment in pre-need funeral services. It is crucial for consumers to understand the implications of committing their funds, as this investment is intended for services rendered at the time of need.

While aspects such as the transferability of funds, potential interest accumulation, and refundability are relevant considerations in pre-need contracts, the primary focus here is on the non-refundability, which serves as a fundamental principle in the integrity of such agreements in Tennessee.