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Glossary of Terms

Clear definitions of common preneed and funeral planning terminology.

Preneed Contract

A preneed contract is a signed agreement between an individual and a licensed funeral home that details the specific merchandise and services to be provided upon the individual’s death.

Key Characteristics

  • Guaranteed Pricing: Many contracts guarantee that the price of the services and merchandise will not increase, locking in today’s rates.
  • Trust or Insurance Funding: The contract specifies how the funds will be held—typically in a state-regulated preneed trust or via a specialized funeral insurance policy.
  • Revocable vs. Irrevocable: Preneed contracts can be revocable (allowing you to cancel and receive a refund) or irrevocable (which cannot be refunded, often required to qualify for Medicaid asset exclusions).