"I shouldn't have done that..." The ongoing epidemic of funeral home closings
you've been paying for a funeral every month. it's a solid investment for the future, but many people wonder if the company they've signed up with will be okay. unfortunately, that fear often becomes a reality. in recent years, it's no secret that the funeral industry has seen a spate of closures.
what's the latest?
in fact, in just three years alone, from 2022 to 2024, eight funeral homes closed their doors, leaving consumers with nearly $30 billion in unrecovered losses. in particular, the sudden closure of WeLife Group (formerly known as Hanang Funeral Home), a mid-sized company with assets of 30 billion won, caused a great shock to many of its members.This frequentclosure of funeralcompanieshas now become a serious social problem.
the trap of 'combining appliances'
the "bundle" trap is a bigger problem: Have you ever signed a contract that said, "If you sign up for an annuity, we'll give you a brand new TV?" These annuity bundles can be even more damaging when an annuitycompany goes out of business . this is because the price of the appliance is often treated as a separate installment purchase, rather than a down payment.
as a result, if the company goes out of business, you'll still have to pay the appliance installments, and the amount of money you' re legally entitled to is calculated based on your total payments minus the value of the appliances, which can be much less.
2 ways to protect your money if a funeral home goes out of business
if you've been notified that your funeral home has gone out of business, what should you do? Don't panic. there are ways to keep your money. you have two main options
legal minimum guarantee: 50% cash for damages
under current law, all funeral directors are required to deposit 50% of the money they receive from customers with a third-party institution, such as a bank or mutual, so that if a funeral home goes out ofbusiness, you can get 50% of the total amount you paid back in cash.
however, this is literally the bare minimum legal mechanism. the other 50% is virtually impossible to get back - you're essentially losing half of your money, which is an unfortunate reality when it comes tofuneral refunds.
recognize 100% value: Conquer 'as-is' service requests once and for all
luckily, there's a much smarter way to get your full value. it's called the'In-Kind' service .
**It's a victim relief program that allows you to transfer 100% of your payments to a defunct funeral home to the services of another healthy funeral home. it's your best option to continue with your existing funeral service without losing money.
it's easy to apply.
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you'll receive a damage notice from your funeral home's mutual association (such as the Funeral Guaranty Mutual).
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on the notice, select "in-kind" instead of "cash compensation" in the compensation method selection box.
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follow the instructions to select a new blue-chip funeral home to transfer your services to, and the process is complete.
with this simple choice, you'll be completely protected from financial losses due to a funeralhome going out of business.
a 'safe funeral signup' checklist to make a regret-free choice
while it's important to repair the damage that's already been done, the best thing you can do is prevent it from happening in the first place by choosing a safe funeral home. Before you sign up with a funeral home, be sure to check these three things
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check KFTCregistration: The first thing you should do is make sure the company you're signing up with is properly registered on the KFTC website. unregistered companies are not legally protected.
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check the depositprotection organization: Make sure to check in your contract or on KFTC's website whether the company deposits customer payments (deposits) in a bank or a mutual fund, and what the percentage is.
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read the contract carefully: Make sure there are no unfavorable terms, especially in the event of cancellation, such as the terms of the refund (return of the funeral contribution) and whether there are additional fees.
worrying about a funeral home going out of business, a new way to prevent it from happening in the first place
but it's not always easy for consumers to sift through all of this information, so how can they avoid the risk of afuneral home goingout ofbusinessaltogether?
what is a "100-won funeral home" that minimizes upfront fees?
the answer lies in minimizing the "down payment" itself. this is because funeral directors take a large amount of customer money upfront, which is why they are so vulnerable to going out of business.
recently, '100 won funeral service' has been gaining attention for solving this structural problem. by paying a minimal amount of money, such as 100 won per month, customers are guaranteed a low total funeral cost for life. the rest of the larger sum is paid later, after the actual funeral services are all done, a "deferred payment system" concept. This way, if a funeralhome goes out of business, I have very little money to lose, and I'm insulated from the damage.
double the legal standard! The overwhelming stability of 100% bank deposits
in particular, services like 'Goi 100 Won Funeral Service' go one step further and deposit the entire amount (100%), even every single 100 won paid by the customer, in the first tier financial institution, the Kookmin Bank. that's double the legal requirement of 50%, making it overwhelmingly safer than any other funeral service. If you want to put your worries about a funeralhome going outofbusinessto rest, this new approach to funeral services is a smart alternative.
frequently asked questions (FAQs)
Q1. If a funeral home goes out of business, do I still have to make payments on the appliances I received as part of a combination?
A1. Yes, unfortunately, the appliance installment is likely to be considered a separate debt contract from the funeral contract and will likely continue to be due. it is separate from your funeral settlement, so be sure to check your contract carefully.
Q2. Will there be any additional costs if I move to the 'As-Is' service?
A: No. You'll keep 100% of your previous payments. however, if the total value of the new funeral product you choose is greater than the amount you've already paid, you'll need to pay the difference at a later time or according to your contract.
Q3. My parents subscribed to a funeral plan, but I found out about the company's closure late. What should I do?
A3. If the time limit for claiming compensation has not passed (usually three years after the business closes), you can still contact the mutual to apply for an 'in lieu of loss' or cash compensation. if your funeral is imminent, you can also contact a participating company to arrange for emergency funeral services.
Q4. If I only pay 100 won't the service cost more later?
A4. No. The core of '100 won funeral service' is that you pay 100 won per month and are 'guaranteed' to receive the total amount of service as it was at the time of signing up. Even if the cost of living goes up, you will still receive the promised amount of service, making it more economical.
conclusion and CTA
the anxiety of a funeralhome going out of businesscan now be eliminated with 'minimal down payment' and '100% bank deposit'.
if you have any further questions or experiences, please feel free to share them in the comments. we'll see you back here with more useful information, and remember, adding neighbors and empathy goes a long way!