Question

If a consumer elects to cancel their pre-need contract in the first 30 days, what happens to the any of the interest it may have earned?

A. It transfers with the contract
B. The initial funeral home can keep it
C. It must be returned to the family
D. It must be reported to Medicaid
E. The law does not address this

Answer 1

The consumer is typically entitled to a full refund, including any interest earned, when they cancel a pre-need contract within the first 30 days, as per consumer protection laws and unless state laws or the contract specify otherwise.

Step-by-step explanation:

When a consumer decides to cancel a pre-need contract within the first 30 days, the common practice adhering to consumer protection laws dictates that all the funds, including any interest earned, must be returned to the consumer. The initial funeral home typically cannot keep any of the interest that has been earned during this period. The specifics, however, could vary depending on state laws and the terms of the contract itself. It's essential to review the pre-need contract and check state regulations for the exact procedures and rights related to the cancellation of these types of contracts. It's also worth noting that this matter would not typically be reported to Medicaid unless the pre-need contract was set up in connection with Medicaid spend-down procedures.