Irrevocable Assignmnet

[kentuckydan]

I'm new around these parts, but hoping to glean some information from a few seasoned folk. I work in a funeral home (serving my funeral director and embalmer apprenticeship as well as selling life insurance) and we have a client who has a few policies with Monumental. Well, to prevent loosing his SSI check (fairly poor health - stents, stroke, etc) he assigned one of them to a funeral home in the area. As time went on, his financial situation changed, his health situation improved, etc. Then, recently his mother died and she was at the funeral home he had assigned that policy to so many years ago. That's where things get complicated.

He's recently wanted to reevaluate his insurance situation. After reviewing his policies, he's decided that he wants to take the reduced paid up option on one of them and assign a newer $10,000 policy to the funeral home in question. One of the funeral directors there is adamant that he do not - saying the $10,000 policy he wishes to assign is either ROP only during the first two years or graded benefit based upon her review of it. I've reviewed the policy personally, and I can say with absolute certainty that it is not. Well, due to her persistence and lack of "people skills" (I've had dealings with her in the past while doing responsibilities associated with my apprenticeship, I know she's an absolute horror to deal with) as well as her behavior in relation to his mothers funeral, he's attempted to change funeral homes to the one I work for. And, that's where things get tricky.

He came down and spoke with us and he spoke with his Monumental agent as well (captive at the "local" - read next major town - TransAmerica office). We did not exist at the time he assigned the policy to the other funeral home - my boss just started the business 9 months ago to fill a gap the other funeral homes have created, namely price. According to his agent, the policy is gone - irrevocably assigned. And, I believe him, sort of. So, my boss called the Monumental home office who assured him that they would send the agent with the customer to the other funeral home and the customer would leave with the policy assigned back to him. Needless to say the customer does not want to just "give" the money to the funeral home upon his death, so if they would not return the assignment, he felt he had no choice but to stay.

Well, a little while has went by and the other day the customer came back and told us that his agent said he had talked with the other funeral home and that indeed it was gone. Now, I believe my boss and I would trust him with my life (although he is a bit overwhelmed by insurance topics) and I believe the customer to an extent. And, we have had issues with the office in question (depending on the day of the week and who calls, you may have a better chance obtaining a headache rather than the information you were needing). So, rather than making it seem like I'm second guessing any of them by calling and digging the issue back up, what's the real deal?

It seems to me that short of anything else, the other funeral director is creating a major ethical issue by refusing to allow the customer to move his pre arrangements. I know that funeral homes are required to refund trust monies received on pre needs, or transfer them at the clients requests, so why not insurance policies. I know that one of the companies I write for (Investors Heritage) specifies on the assignment form that the policy is assigned to a legacy trust and that payment will be made to the funeral home providing the services regardless to whom the policy is assigned. I've just been appointed with Monumental (last week, in fact. Went through TR King) so I haven't really had any dealing with them yet, so I'm not sure what their assignment form even looks like as we just use a plain vanilla one at the office for companies other than Investors. I'm betting, though that besides the ethics issue, the other agent is completely correct. If that is the case, though, why did home office assure my boss that a) the agent would personally go with the customer to the other funeral home and b) would return with the policy assigned back to the customer.

Or, maybe one of you more experienced folks would know a different/better/more appropriate way to approach the situation, if not obtain the intended result. He's a very good client to have (has already been recommending our funeral home to others based solely upon his friendship with us - he'll stop by just to chat and we really enjoy that, it gets lonely and many people are afraid to stop by) and I'd like to provide him with a better explanation at least, if not find a solution for his problem.

Thanks in advance,

KentuckyDan

 

[Josh]

I know it's late and probably some of this is on me, but I can't understand what you're even asking. Can you shorten it down to a few sentences?

Near as I can tell you're saying that a client (or prospect) assigned a life insurance policy to a different funeral home by way of irrevocable assignment, but now she wants to change it to another funeral home (you folks)? The word irrevocable generally means it can't be changed. It's one of those decisions that you only make when you're 100% sure you want to be doing it. Did the other funeral director give her some sort of incentive to do it this way as far as a better price goes or something of that nature? If so, there is nothing unethical about a funeral director expecting the lady to hold up her end of the agreement (I may misunderstand the situation, but that's what it seems like).

So what's the really short version of the above?

 

[Newby]

Irrevocable assignment does NOT mean he can't change funeral homes. He can do that anytime he wants.

I'm a licensed funeral director/ Preplanner/ insurance agent in Kentucky. I can walk you through it. Just contact me through my website www.fexcontracting.com

 

[funeraldirector]

The primary reason to make the contract irrevocable is to protect the client's medicaid, making the life ins an exempt asset as to medicaid eligibility. The FH should release the assignment since it the right thing to do and they're creating a lot of ill will. We have a saying in the funeral business, "Everybody knows 250 people."

 

[kentuckydan]

Thanks Ya'll. Josh, the policy was assigned to protect his benefits. Not knowing what the Monumental assignment form looked like, I was wondering if it was like my Investors Heritage assignment form, assigning the policy to an irrevocable legacy trust to pay the funeral home providing the services regardless of what funeral director signs the form accepting the assignment. Or, if it were not, if there was some way to approach the situation to obtain the intended result. I'm also curious why Monumental home office would make a promise to send a field representative with the client and would return with the policy assigned back to the client if they could not deliver.

The lady FD in question is an absolute horror to deal with, and the community knows it too. The only thing is, at least I have found, this business is the most traditional one around - "Well, X funeral home buried such and such, so that's where I'll have to go". In my personal dealings with her, she's acted worse than a two year old - cussing, fussing, belittling our clients, hanging up on me. But I suppose there are those like that in any industry.

Newby, I am doing so right now.

funeraldirector, Amen. Good will is everything in this business. One bad PR incident could sink you especially when you are starting out. We've had a few incidents in our short history (namely family squabbles) and it's painful to watch, knowing regardless of whether you can do anything or not, your PR is sure to take a hit ("Well, they didn't stop so and so from showing up, they should have known we haven't talked in 20 years nor do we want to now." Or "Well, even though I'm an ex sister in law twice removed, I should of had more say in the arrangements than the biological brother/sister, wife, son, daughter, etc").

 

[Newby]

Just for the record. No funeral home can ever hold someone's life insurance policy captive.

Even if a policy has XYZ Funeral Home as the irrevocable owner and beneficiary, if that family comes to me and wants to use my funeral home as the provider we can do the funeral.

It's best if we have the transfer done while the insured is still living and ALL funeral homes do have to co-operate but some have to be reminded of it.

But even if mom died today and her policies are owned by XYZ Funeral Home and XYZ Funeral Home is the beneficiary, we can go ahead and perform the funeral IF the next of kin request it and the insurance company has to pay us.

Payment to a funeral home beneficiary is different than to a human beneficiary. It is always "as interests may appear" meaning they HAVE to perform the funeral to get paid. If the family has the funeral elsewhere, that other funeral home will be the one to get paid.

There is always trouble if there is no spouse but several kids who don't get along (equal decision makers by law.) But other than that it is pretty clear cut.