Nebraska Department of Insurance

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What is pre-need?

Pre-need is the purchasing of burial or funeral merchandise (casket, vault, monument, etc.) or services by a member of the general public prior to the time of death.

How is the sale of pre-need services and/or merchandise financed?

The purchase of pre-need services and/or merchandise may be financed one of three ways:

• Life Insurance
• Annuity Contract
• Pre-Need Trust

What is a pre-need trust?

When a pre-need sale is made, funds from the sale are placed in a federally insured bank within the state of Nebraska until the time of death. These funds may be placed in either an individual trust account or a master trust account, a pool of many individual trusts.

What are the requirements for a pre-need trust?

Upon making a pre-need sale, a pre-need seller is required to complete a written agreement and maintain a separate record of each pre-need trust sold.

Pre-need trust funds, equaling at least 85% of the retail sales price of the trust, are required to be deposited in a federally insured Nebraska bank within 60 days after receipt.

The remaining amount, up to a maximum of 15% of the retail sales price, may be retained by the seller of pre-need to offset administration of the trust.

Is there more than one type of pre-need trust?

Yes. There are two types of pre-need trusts, irrevocable and revocable.

What is the difference between the two types of pre-need trusts?

Funds placed in an irrevocable pre-need trust may not be withdrawn until the time of death. Funds placed in a revocable pre-need trust may be withdrawn at anytime. The irrevocable pre-need trust is primarily used to finance services and has a maximum amount of $3,000. The revocable pre-need trust is used primarily to finance merchandise and has no maximum amount.

Who sells pre-need trusts?

The establishments which sell pre-need trusts are funeral homes, cemeteries, and monument companies. In order for these establishments to engage in the sale of pre-need trusts, they must first obtain a pre-need seller's license.

In addition, individuals, engaging in the sale of pre-need trusts, must be licensed as agents for their designated establishments.

Who can be the Trustee?

A financial institution (some exceptions exist) within the state whose deposits are insured by the FDIC.

Who issues licenses and regulates the sale of pre-need trusts?

The regulation of the pre-need trusts, including the issuing of pre-need seller and agent licenses, is handled by the Nebraska Department of Insurance.

How does the Nebraska Department of Insurance regulate pre-need sellers?

Pre-need sellers are subject to departmental examination and required to file an annual pre-need sales report with the department.

In addition the department is constantly reviewing its licensing records to ensure that all sellers and agents have current and active licenses.

Can the general public contact the Nebraska Department of Insurance regarding a pre-need seller's or agent's license?

Yes. In fact the department recommends that the individual ask to see a seller's license or check with the department regarding a pre-need seller's license before entering a pre-need sale.

Does the Nebraska Department of Insurance handle consumer complaints against pre-need sellers or agents?

Yes. The department handles all pre-need related areas, including consumer complaints.

How does an individual file a complaint with the Nebraska Department of Insurance?

A pre-need complaint form must be completed and submitted to the department, along with any supporting documentation. Forms may be obtained by contacting the department at the address and phone number listed below or by completing the appropriate form under Complaint Forms.

How can an individual obtain additional information about pre-need trusts?

Additional information regarding pre-need trusts can be obtained by contacting the Nebraska Department of Insurance at the address or phone number listed below.

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