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Insurance policy does not fall under Pre-Need Act

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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.

 

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  1. My daughters' kids was removed from the home in March 2015, she has been in total compliance with the requirements of cps, she is going to court on the 4th of August. Cps had called the first team meeting last Monday to inform her that she was not in compliance, by not attending home based therapy, which is done normally with the children in the home, and now they are recommending her to have a psych evaluation, and they are also recommending that the children not be returned to the home. This is all bull hockey. In this so called team meeting which I did attend for the best interest of my child and grandbabies, I learned that no matter how much she does that cps is not trying to return the children and the concerns my daughter has is not important to cps, they only told her that she is to do as they say and not to resist or her rights will be terminated. I cant not believe the way Cps treats people knowing if they threaten you with loosing your kids you will do anything to get them back. My daughter is drug free she has never put her hands on any of her children she does not scream at her babies at all, but she is only allowed to see her kids 6 hours a week and someone has to supervise. Lets all tske a stand against the child protection services. THEY CAN NO LONGER TAKE CHILDREN FROM THERE PARENTS.

  2. Planned Parenthood has the government so trained . . .

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