Consider insurance to cover funeral costs

MONEY 301 Family members have enough to deal with when they lose a loved one without the stress of negotiating with a funeral home, says Ellen Roseman

en Francis is a life insurance broker and financial adviser in Toronto. He’s run his own business for 37 years. As you might expect, he has lost a few clients to death and has attended their funerals. But he never paid much attention to funeral planning until he had an eyeopening experience at a Toronto funeral home.

“ It was in February 2003,” he says. “ I went to pay my respects to a client who had died and I saw another client coming from a different part of the funeral home. His brother- in- law had died.”

Francis spent time visiting both families. He asked them how much their funerals had cost.

“ One paid $ 6,700 and the other paid $ 22,800,” he says, still astounded at the price gap. “ I asked myself, what was going on.

“ I started digging and getting really interested in the story.” He found the secret behind the lowerpriced funeral: The family had bought a life insurance policy to cover the costs. The policy included the services of Everest Canada, a company that acts as a consumer advocate for those planning a funeral after a loved one dies.

“ We don’t sell caskets or other products,” says Everest founder Mark Duffey. “ But if we think casket prices are out of line, we find a wholesaler to supply one at a lower price.”

Everest works exclusively with Western Life Assurance Co. ( formerly Federated Life Insurance), based in High River, Alta. The life insurance policies are available in coverage amounts of $ 5,000, $ 7,500 and $ 10,000.

Everest offers a 24-hour toll-free number that is answered by trained staff, many of whom have worked in the funeral industry. When you sign up as a client, you fill in a detailed guide that describes your wishes for your funeral or cremation. You do it yourself or with the help of a telephone adviser. Once your plan is completed, you get a copy. So do family members or friends you want to have it. They call Everest when they get the news of your death. An adviser goes to work comparing prices — and negotiating for the best deals — at local funeral homes of your choice.

If there’s no plan on file for you, the adviser will create one in consultation with your family.

“ We put the plan in motion and we stay with people for several days, as long as it takes, if that’s what they want,” says Duffey. “The consumer never has to do anything.” He was the president of Carriage Services Inc., a funeral home and cemetery company traded on the New York Stock Exchange.

In 2003, he started Everest with the help of EDS Corp., a global technology company.

“ EDS said the funeral industry was right for a new business model and we’d figure it out together,” he says.

Everest, launched in Canada, is now based in Houston. Staff members work in EDS facilities and they’re on the EDS payroll. The package has been endorsed by CARP, Canada’s Association for the Fifty Plus.

Sara McLennan, president of the McLennan Group Insurance Inc. of Waterloo, which offers CARP’s insurance products, finds customers don’t believe such a service exists.

“ It’s challenging,” she says. “ People assume this is a prepaid funeral. Or they think it’s taking away business from the local funeral home.

“ Are these misperceptions? Absolutely. But we’re marketing a new concept. I think Everest will become a household name.” The McLennan Group provides a link to Everest’s website, www. everestfuneral. ca, at its website, www. carpinsurance. ca. AIG Life Insurance Co. of Canada, formerly known as Norwich Union, is a well- known competitor that sells small insurance policies to cover funeral costs.

It’s taking on Everest by introducing its own telephone assistance services, available at all hours.

“ If you pass away over 200 kilometres from your Canadian residence, we will arrange and pay for transportation to bring you back to your home in Canada,” says an AIG mailing sent to my home last week. Upon request, AIG will provide your family with information to help them deal with the paperwork that follows death — documents needed to get access to pensions and government benefits — and will provide names and addresses of local funeral homes.

That’s not as helpful, however, as advocating for your family when dealing

Kwith funeral directors. I think the industry is far from customerfriendly, based on my own experiences in planning funerals for my parents and in- laws. When my mother died this year, I worked with funeral homes in Toronto and Montreal ( where she was buried).

I wrote to both funeral homes afterward to point out the problems we had experienced. But neither company responded to me.

Francis says his clients have life insurance already. He encourages them to buy $ 5,000 more to get the Everest package. Lennox Blizzard, who’s a retired client, bought a policy after taking care of his brother’s funeral.

“ It’s just a matter of getting everything in order,” Blizzard says. “The funds are there to cover costs and your executors don’t have to worry about anything.”

Francis also has a $ 5,000 Western Life policy for himself. He wants to be cremated and doesn’t want his family to buy a casket.

“ I was skeptical until I saw the service,” he says. “ They treat people really well.”

Family members have enough to deal with when they lose a loved one. Trying to negotiate with a funeral home just adds to their stress and grief. Ellen Roseman’s column appears Wednesday, Saturday and Sunday. You can reach her by writing Business c/ o Toronto Star, 1 Yonge St., Toronto M5E 1E6; by phone at 416-945-8687; by fax at 416-865-3630; or at eroseman@thestar. by email.