Under the Funeral Services Act funeral homes that enter into Prepaid Funeral Contracts must hold a special license to accept payment for Pre-need Funerals. All details of the arrangements and the payment plan must be provided in a written contract. The written contract must be approved by the Alberta Funeral Services Regulatory Board.
If you change your mind after signing and receiving a copy of the contract, you have 30 days to cancel it without charge or penalty. You can still cancel the contract after the 30-day period, but in that the seller may charge you an administration fee. The seller must deposit the money you pay for a Pre-need Plan into a trust account. Your contract will tell you where the trust account is located.
Some funeral homes sell Pre-need Funeral Plans that are paid for by an insurance contract. If you choose to buy one of these, your right to cancel will depend on the terms of the insurance contract. The cancellation rights described above will not apply.
When looking for a Pre-need Plan, shop around if possible. Ask yourself these questions before signing any contract:
- How will your Pre-need Funeral be funded?
- Will the funeral home be placing your payments in trust or will you be buying an insurance contract?
There are advantages and disadvantages to each form of payment. For example, a trusted plan may have better cancellation rights than a life insurance plan, but an insurance plan may be more easily transferred if you move to another part of the province or country.
- If you are buying a trusted plan, what are the administration charges, if any?
- If you are making installment payments, is there an extra charge for late payment?
- Does the plan cover the entire cost of your prearranged funeral, or will there be extra charges to cover increased costs due to inflation?
- Does the funeral home have a good reputation? Ask friends for recommendations or check the Better Business Bureau. Ask yourself if the funeral home is likely to be in business in the future.
- Is the funeral home licensed by the Alberta Funeral Services Regulatory Board?
It is illegal for a funeral service business to sell Pre-need Funeral Plans over the telephone or door-to-door unless you have specifically requested it. This also applies to sellers of insurance contracts that are advertised or represented as paying for specified funeral goods or services, or in which the beneficiary is a funeral business.
Please contact us with any questions you may have.