The short answer is yes, it may be used for final expenses. Most funeral service providers will accept an assignment on a validated insurance policy from the named beneficiary. The assignment will specify the amount the insurance company is to pay to the provider, with the remainder being paid to the beneficiary or beneficiaries. One beneficiary can assign their portion, however, in the situation where there are multiple beneficiaries, you will have to decide if all of them are willing to provide a portion of their benefit or if only one or a few of you are willing to participate in the assignment.
If there is no assignment, the beneficiary, or beneficiaries, can file a claim on their own, and then use the proceeds to pay for final service expenses.
Further, if the insured becomes a resident of an extended care facility and needs to get qualified for Medicaid, the policy will be considered an asset and most likely, will need to be cashed in. Once that occurs, you may pre-pay final expenses, and at that time, the contract may be certified as “irrevocable” by the Michigan Department of Health & Human Services (DHHS)…thus keeping it from being considered as an asset.
Some of the things that can be pre-paid in a DHHS irrevocable contract are: casket, vault, cemetery property, opening and closing of a grave, flowers, obituary publications, memorial folders, holy cards, grave marker and final date cut, marker foundation, a niche with opening and closing, burial clothing, cremation fees, cremation permit fee, and death certificates if needed.
For assistance with pre-planning, pre-paying, Medicaid spend down, and irrevocable contracts, contact your experienced and trusted Funeral Service Provider.
