National Board Of Examination (NBE) Arts Practice Exam

What stipulates that the funds cannot be refunded in a preneed funeral contract?

1. The merchandise selected cannot be changed

2. The funeral home selected cannot be changed

3. The funeral home must conduct the service for what funds are available

4. The contract is irrevocable

The correct answer is: The merchandise selected cannot be changed

The correct choice indicates that the contract is irrevocable. In the context of preneed funeral contracts, an irrevocable agreement typically means that the funds deposited with the funeral home are committed to the terms specified within the contract and cannot be refunded or withdrawn. This gives assurance to both the service provider and the consumer that the funds will be utilized as intended, thereby securing the services agreed upon when the time comes. Irrevocability serves a critical role in preneed contracts, as it helps prevent changes in circumstances from affecting the financial commitment made for funeral services. This characteristic is advantageous for consumers looking to ensure their arrangements are honored without the risk of alterations that might occur due to financial or personal reasons in the future. Having this stipulation in place ensures that the funeral home is obliged to provide the agreed-upon services when necessary and that the funds will be directed toward fulfilling those specific commitments.