Last week Funeral Director Daily published this article titled “Know your customer — How’s their credit”.  That article delved into the American consumer credit profiles and why, before extending credit, you needed to know the consumer you are dealing with. . . and how difficult that is in today’s market.

The article also looked into a hypothetical situation of what might happen if a family chooses $10,000 worth of services and then can only come up with about $2,000 in cash and or credit card credit to pay for those services.  It was mentioned that that would be a difficult discussion if it was taking place at the arrangement table prior to signing the statement of goods and services.

I mentioned that there are times when credit has to be extended and that situation might be one of them.  However, prior to that time you would have had to build a strong operating funeral home so you have the ability to extend this credit, without damaging your ability to pay your bills.

So, it is only natural that you do what you can to turn the services you conduct into cash as soon as possible so you have that strong base which allows you to pay suppliers and take the discounts, pay off your loans without penalties, and handle all payables on a current basis.

Most funeral homes look to their efforts in the preneed business as a guarantee of future business.  However, I also came to recognize preneed funding as, not only a market share guarantee in the future, but a great way to improve cash-flow along the way.  When we serviced preneed accounts at death many times we had the check for services on the way prior to us conducting the funeral service and in a business where cash is king that always let us build our cash which in turn allowed us to take maximum discounts and build greater profits.

Last week, however, I was also reminded of how fast that insurance assignements can get cash to your funeral home and work in the same way in strengthening your cash position.  And, many times insurance assignment funding, when accessed, has other intangibles that can make the cash even better than in a preneed account.

Tom Anderson
Funeral Director Daily

A lot of funeral homes don’t use insurance assignment funding for funerals because they think the process of getting the money is cumbersome.  In today’s internet and cell phone world nothing could be farther from the truth.  Insurance assignment funding is a great way to get cash. . . as with preneed accounts, into your bank account many times before the service is even conducted.

Here’s what a lot of funeral home owners don’t understand about insurance assignment funding according to our friends at C&J Financial:

• About 6 in 10 families have insurance available to them
• Only about 16% access this insurance for “Funeral Payments”
• Families that do access their available life insurance for funeral costs spend 31% more on the death care services

So, if you want to get your cash quicker and at the same time allow families to know that they have more available for the funeral expenses, how about having one of the first questions at the arrangement conference be asking the family if you can help them access their life insurance proceeds as quick as possible?

The people at C&J will help with all the processing and in most cases can pay the funeral costs within 24 hours of verification of the policies. . . Quite simply, they will handle everything for you and get that cash to your funeral home very quick.

Some cynics might say that the financial issues should be left to the family, but I would argue that helping to unlock available funding to pay for the funeral services may be very welcome by the family and should be considered a “Service” you can provide to your families in need.

If you don’t have the arrow of “insurance assignments” in your quiver of tools to help families coping with loss, maybe it is time to look into it.  You can learn more about insurance funding here.

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