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					What happens to the prices that           Texas law requires sellers of prepaid           Information About
were guaranteed if the funeral            funeral contracts to hold a permit
provider goes out of business?            issued by the Texas Department of
                                                                                    Prepaid Funeral Planning
                                          Banking. Do not contract with any        The contract you are considering
The applicable Prepaid Funeral            seller who does not hold a valid
Guaranty Fund (Guaranty Fund)                                                      purchasing is commonly called a
                                          permit. To view a list of sellers that   prepaid funeral contract. The prepaid
guarantees the obligations of the         have permits or for additional
seller.                                                                            funeral contract will impose
                                          information regarding prepaid funeral    conditions on you (the buyer), the
                                          contracts, go to the website located     seller or permit holder, and the
Trust-Funded: If the seller and
                                          at:                                      funeral provider. Texas law grants
funeral provider are the same entity,
the Department will seek another           www.prepaidfunerals.state.tx.us or      you certain rights, protections, and
funeral provider to perform the           contact the Texas Department of          options.
funeral services in the prepaid funeral   Banking at:
contract at no additional costs to you.                                            Read this informational brochure
Funds from the Guaranty Fund are                  2601 N Lamar Blvd                carefully. It can help you understand
available to accomplish this.                     Austin, Texas 78705              prepaid funeral contract funding
                                                    1.877.276.5554                 options.
When the seller and funeral provider             www.banking.state.tx.us
are not the same entity, see the
discussion below for insurance –
funded contracts.
Insurance-Funded: When the seller
and the funeral provider are not the
same entity, the Department cannot
ensure another funeral provider will
honor the guaranteed prices.
However, the seller may be able to
assist in finding another funeral                                                     This informational brochure is
provider that will honor the prices                                                            provided by
that were guaranteed. Funds from
the Guaranty Fund cannot be used in       Be sure to tell your family about any    THE TEXAS DEPARTMENT OF
this situation.                           plans you make and let them know                 BANKING
                                          where the documents are located.
In Texas, a prepaid funeral               Questions and Answers on Other           prices agreed to by the original
contract can be funded by a trust         Differences in the Funding               funeral provider.
or by insurance. A seller may offer       Options
one or both funding types.                                                         Insurance-Funded: Policy proceeds
                                          Do I get a refund if I cancel a          may be reassigned to a different
In a trust-funded prepaid funeral         prepaid funeral contract?                funeral provider, but the new funeral
contract, payments are placed in an                                                provider is not obligated to honor the
                                          Trust-Funded: Yes. In most cases,        prepaid funeral contract prices agreed
approved interest bearing restricted
                                          you will get 90% of your payments        to by the original funeral provider.
bank account or formal trust account
                                          plus one-half of all interest earnings
to pay for the future costs of the
                                          for contracts purchased after            Can the payments total more than
selected funeral goods and services.
                                          September 1, 2001.                       the price of the prepaid funeral
Payments on the contract are made to
                                                                                   contract?
the seller.                               Insurance-Funded: Yes. You must
                                          cancel both the prepaid funeral          Trust-Funded: In most cases no. If
In most trust-funded contracts, the
                                          contract and the insurance policy or     the prepaid funeral contract is
seller and the funeral provider are the
                                          annuity that funds it. You then          financed over time, the seller may
same entity.
                                          receive the cash surrender value of      charge interest. However, most
In an insurance-funded prepaid            the policy or annuity. The cash          sellers do not charge interest.
funeral contract, payments are used to    surrender value varies, but is most
                                          often less than your total payments.     Insurance-Funded: Yes they can,
purchase an insurance policy or
                                                                                   depending upon factors like your age
annuity to pay for the future cost of
                                          Can a prepaid funeral contract be        and health when the contract is
the selected funeral goods and
                                          transferred to another funeral           purchased, date of death, and the type
services. The Texas Department of
                                          provider? Will the prices that were      of policy issued. The insurance policy
Insurance has approved many kinds
                                          frozen or guaranteed still be            or annuity that funds the prepaid
of insurance policies and annuities to
                                          honored?                                 funeral contract dictates the payments
fund prepaid funeral contracts. An
                                                                                   to be made. The seller can calculate
application for insurance must be         Trust-Funded: The contract is not        the total payments to be made.
completed at the same time as the         transferrable. While you may assign
prepaid funeral contract. Payments on     your trust account cancellation value
the insurance policy or annuity           to a different funeral provider, the
funding the contract are made to the      new funeral provider is not obligated
insurance company.                        to honor the prepaid funeral contract

				
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