A Pre-Need Annuity provides peace of mind for one’s family by enabling a client to make funeral arrangements before the time of need. This product is different from a Single Pay or Multi-Pay Pre-Need Plan due to the structure of the financing; it’s also not the same as a Final Expense policy — which is a small-level, face-amount policy sold to a policyholder that ensures funds will be available to cover final expenses at death. (It does not include an underlying pre-need contract; the beneficiary can use the death benefit in any way they choose.)
Some important information about Pre-Need Annuities:
- They are available to those who cannot get (or do not want) insurance, or to those who wish to set aside funds to provide for their future funeral expenses. It may be written on applicant who is terminally ill, in which case no commission will be paid. (This is treated as a service to the funeral home establishment.)
- The interest paid on the annuity is compounded annually and added daily.
- The interest rate is reviewed annually and may be changed by the company.
- There is no shrinkage of the principal paid at death, as there is with many other annuities.
- The flexible premium means that the client may choose the way premium payments are to be made; the entire amount may be paid with the application, or the company will bill the applicant for the amount requested.
Usually, Pre-Need planning covers arrangements for burial options (casket and vault selection) or cremation options, floral arrangements, memorial or funeral service, catering, music, etc.
Why Agents Offer Pre-Need Annuities
Just as Pre-Need Annuities aren’t the best fit for every client, they aren’t always the best fit for Agents. Consider these questions:
- Are these plans beneficial for the people in your community and the areas you serve?
- Do you offer similar/competitive products?
There are many compelling reasons to offer Pre-Need Annuities, such as:
- You can help families with some of the most difficult decisions of their life
- You can provide your clients with peace of mind, as they will know they have a health plan behind them
- You’ll be serving the needs of your clients and community
- You can offer a profitable product that will help your bottom line
How to Get Started with Pre-Need Annuities
If you decide to offer Pre-Need Annuities, we recommend talking to someone from the Premier team of experts. They’ll provide answers to your questions, and have tools available to support your new product offering.
Just complete this contact form and we’ll get in touch as soon as possible: