What is a "preneed contract"?

A preneed contract is specifically defined as a legal agreement where consumers prepay for funeral services in advance of need, ensuring that their wishes are documented and secured. This type of contract allows individuals to organize and plan their funeral arrangements ahead of time, often at a current price rather than at future market rates, which can lead to significant cost savings.

Preneed contracts are designed to provide peace of mind to the consumers and their families, knowing that the necessary services will be provided according to their preferences without further financial burden at the time of the funeral. Such contracts can cover a range of services, including casket selection, burial arrangements, and memorial services.

Other choices, such as a verbal agreement made at the time of death, do not capture the formal and planned nature of a preneed contract. Similarly, while some might consider insurance policies related to funeral expenses, these policies serve a different purpose by providing funds after one's passing rather than arranging and securing services in advance. Lastly, while a contract that guarantees burial space may fall under the umbrella of funeral planning, it is not as comprehensive as a preneed contract, which encompasses a broader range of services and arrangements.