House Journal: Page 1337: Monday, April 23, 2001
32 benefits is contingent upon the establishment's
33 delivery of cemetery merchandise, funeral merchandise,
34 and funeral services pursuant to a purchase agreement.
35 c. The policy shall have an increasing death
36 benefit or similar feature that provides some means
37 for increasing the funding as the cost of funeral and
38 cemetery goods and services increases.
39 6. With the written consent of the purchaser, an
40 existing prepaid purchase agreement with trust-funded
41 benefits may be converted to a prepaid purchase
42 agreement with insurance-funded benefits provided the
43 establishment and the insurance benefits comply with
44 the following provisions:
45 a. The transfer of the trust funds to the
46 insurance company must be at least equal to the full
47 sum required to be deposited as trust principal under
48 the trust-funded prepaid purchase agreement plus all
49 net earnings accumulated with respect thereto, as of
50 the transfer date. Commissions, allowances, surrender
Page 17
1 charges or other forms of compensation or expense
2 loads, premium expense, administrative charges or
3 expenses, or policy fees shall not be deducted from
4 the trust funds transferred pursuant to the
5 conversion.
6 b. The face amount of any insurance policy issued
7 on an individual must be no less than the amount of
8 principal and interest transferred for that individual
9 to the insurance company, and any supplemental
10 insurance policy issued to cover the unfunded portion
11 of the purchase agreement must have a face amount that
12 is at least as great as the unfunded principal
13 balance. The face amount of the insurance purchased
14 shall not, under any circumstances, be less than the
15 total of all payments made by the purchaser pursuant
16 to the agreement plus all net earnings accumulated
17 with respect thereto, as of the transfer date.
18 c. The insurance policy shall not allow for
19 contesting coverage, limit death benefits in the case
20 of suicide, refer to physical examination, or
21 otherwise operate as an exclusion, limitation, or
22 condition other than requiring submission of proof of
23 death or surrender of policy at the time the prepaid
24 purchase agreement is funded, matures, or is canceled,
25 as the case may be.
26 d. The establishment shall maintain a copy of any
27 prepaid trust-funded purchase agreement that was
28 converted to a prepaid insurance-funded purchase
29 agreement and retain the payment history records for
30 each converted purchase agreement prior to conversion
© 2001 Cornell College and
League of Women Voters of Iowa
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