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Are Your Pre-Need Sales Declining?

Posted by Christopher Kuhnen on September 1, 2014

    Have you paid close attention to the news headlines lately? The consumer financial news is enough to give you pause. Here are two recent examples of news stories that don’t bode well for families having the readily available financial means to pay for the kind of traditional funeral services they desire.

  According to the Employee Benefit Research Institute (EBRI) - 2014 Retirement Confidence Survey, 24 percent of workers age 55 and over have saved less than $1,000 for retirement. Ouch! It gets even worse. The average 401(k) balance is only a little more than $58,991, according to EBRI. There is certainly not a lot of extra money set aside for final expenses.

  The families we serve have other challenges as well. According to a study by the Urban Institute and Encore Capital Group's Consumer Credit Research Institute, about 77 million Americans have a debt in collections. The debts sent to collections ranged from $25 on the low end and to more than $125,000 on the high end. In 12 states, including the District of Columbia, more than 40 percent of residents with a credit file have a bill in collections. That includes Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Texas, and West Virginia. On the opposite end, Minnesota, North Dakota, and South Dakota each have about 20 percent of residents with credit files who have reported debt in collections.

  Why are your cremation rates rising and overall funeral sale averages dropping? These two news reports alone would strongly indicate, it’s more financially driven than anything else. People just don’t think they have the money to spend for the type of funeral services they would really prefer. For your families, if it’s a choice between pre-paying their funeral services or paying off their existing debt and putting food on the table, guess which will win out?

  As I travel around the country, I keep hearing funeral home owners, pre-need sales managers and selling agents lament their pre-need sales are down this year compared to last year. Not necessarily the total number of contracts they are writing, but rather the total sales volume. People are still prearranging in as strong a numbers as they traditionally have; however, due to increasing financial strain on their already shaky budgets, they have to lower the overall amount they are spending. Not because they want to, but because they have too.

  What can we do to help them out? We can start by continually and better explaining to all families the features and benefits of time payment, pre-need insurance plans. The families we serve don’t know what they don’t know. They don’t fully realize and/or comprehend they can make affordable monthly payment plans for the funeral goods and services they truly desire. They don’t need to settle for less than they genuinely desire for their final farewell, when there is a better way for them to have what they want, without breaking the bank to do it.

  If you offer pre-need insurance plans at your funeral home and you are not fully knowledgeable and fluently conversant in the numerous features and benefits of time payment (multi-payment) plan offerings, shame on you. Now is the time to bone up on your insurance carriers multi-pay plan options and be prepared to share them with all the families you see. I assure you, in relatively short order, you will see your funeral homes overall funeral sales averages begin to rise to the levels we all need to remain profitable.


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