ILNews

Insurance policy does not fall under Pre-Need Act

Back to TopCommentsE-mailPrintBookmark and Share

A Marion Superior Court correctly ruled that a company that sells an insurance policy with the option to assign it to a trust to use the funds for funeral services is not subject to the Pre-Need Act, the Indiana Court of Appeals ruled.

The State Board of Funeral and Cemetery Service issued a cease and desist order to Settlers Life Insurance Co. after it determined the company was selling insurance policies that are simultaneously assigned into irrevocable funeral trusts that restrict dispersal of trust funds to funeral expenses designated as pre-paid services or merchandise by I.C. 30-2-13-8 without the certificate of authority required by I.C. 30-2-13-33. The issue came to the board’s attention from Frain Mortuary in Winamac – the mortuary believed Settlers was in violation of the Pre-Need Act.

Evan Hughes bought at $10,000 insurance policy from Settlers, payable upon proof of her death. Because she did not have the funds to pay for her burial, she opted to assign the policy irrevocably to a National Guardian Life Insurance Co. Trust. Upon her death, the insurance proceeds could only be paid for funeral and burial goods and services as listed in the trust.

Frain Mortuary received Hughes’ policy on transfer from Settlers.

After the board issued its order, Settlers filed a petition for judicial review, in which the Marion Superior Court overturned the order, and issued a declaratory judgment stating that the Pre-Need Act does not apply to the type of policy Settlers sells.

The plain language of the Pre-Need Act supports Settlers’ argument that its at-need product is not covered by the Act, Judge John Baker wrote in State Board of Funeral and Cemetery Service v. Settlers Life Insurance Company, 49A05-1307-PL-365. Settlers’ product does not obligate it to provide pre-paid services or merchandise; instead, it pays a death benefit for funeral expenses that may be used at any mortuary. Settlers isn’t defined as a seller under the Act, and its product is not designed to cover pre-need purchases, the court held.

“While we agree that Settlers’s product may not meet the needs of those who wish to prepay their funeral expenses, it is because we find that Settlers sells a product that fulfills a different purpose than pre-need products. It is not a product for those who wish to pre-purchase their funeral services; it is a product that is meant to provide funds to purchase funeral expenses on an at-need basis,” he wrote.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

  2. As an adoptive parent, I have to say this situation was as shameful as it gets. While the state government opens its wallet to the Simons and their friends, it denied payments to the most vulnerable in our state. Thanks Mitch!

  3. We as lawyers who have given up the range of First amendment freedom that other people possess, so that we can have a license to practice in the courts of the state and make gobs of money, that we agree to combat the hateful and bigoted discrimination enshrined in the law by democratic majorities, that Law Lord Posner has graciously explained for us....... We must now unhesitatingly condemn the sincerely held religious beliefs of religiously observant Catholics, Muslims, Christians, and Jewish persons alike who yet adhere to Scriptural exhortations concerning sodomites and catamites..... No tolerance will be extended to intolerance, and we must hate the haters most zealously! And in our public explanations of this constitutional garbledygook, when doing the balancing act, we must remember that the state always pushes its finger down on the individualism side of the scale at every turn and at every juncture no matter what the cost to society.....to elevate the values of a minority over the values of the majority is now the defining feature of American "Democracy..." we must remember our role in tricking Americans to think that this is desirable in spite of their own democratically expressed values being trashed. As a secular republic the United States might as well be officially atheist, religious people are now all bigots and will soon be treated with the same contempt that kluckers were in recent times..... The most important thing is that any source of moral authority besides the state be absolutely crushed.

  4. In my recent article in Indiana Lawyer, I noted that grass roots marketing -- reaching out and touching people -- is still one of the best forms of advertising today. It's often forgotten in the midst of all of today's "newer wave" marketing techniques. Shaking hands and kissing babies is what politicians have done for year and it still works. These are perfect examples of building goodwill. Kudos to these firms. Make "grass roots" an essential part of your marketing plan. Jon Quick QPRmarketing.com

  5. Hi, Who can I speak to regarding advertising today? Thanks, Gary

ADVERTISEMENT