The moral dilemma with Preneed

If Preneed makes the worst day of someone’s life a little easier, but you may experience less profit by telling them, are you obligated to tell them?

You’re driving down a dark road during a wild storm. You drive past a bench with three people huddled miserably on it, waiting for a bus in the raging weather:

  1. An older lady who looks like she’s in distress and possibly needs medical help.
  2. An old friend of yours who once saved your life.
  3. The man or woman of your dreams. Seriously, love at first sight material.

Your tiny car has room for just one passenger. Who do you invite into the car?
If you choose the woman in distress, you’re a hero. If you leave her behind, you could be seen as a first-class heel. Or do you choose your old friend? You owe him a major favor, and you have a personal interest in this guy’s well-being. But then there’s your potential spouse, your possible future.
What to do? What to do? You need to offer a well-reasoned response, but you must do it fast.
The above was a question I posed to candidates during a job interview. The winning answer to this moral dilemma earned the candidate a job offer: “I’d get out of the car and give the keys to my friend. He could drive the sick lady to the hospital, and I’d wait for the bus with the person of my dreams.”

What is a moral dilemma?

A moral dilemma is a decision between two possible moral imperatives, neither of which is unambiguously acceptable nor preferable. Unlike the bus stop decision, sometimes the answers are not so clear. Sometimes it is the lesser of two “acceptable” or “preferable” decisions.
You’ve probably heard about the “trolley car” dilemma: A runaway trolley is barreling down the railway tracks. Ahead on the tracks, five people are tied up and unable to move. The trolley is headed straight for them. You are standing some distance off in the train yard, next to a lever. If you pull this lever, the trolley will switch to a different set of tracks. However, you notice that one person is on the side-track. You have two options:

  1. Do nothing and allow the trolley to kill the five people on the main track.
  2. Pull the lever, diverting the trolley onto the side-track where it will kill one person.

What is the right thing to do? The complexity arises out of a situational conflict in which choosing one option would result in transgressing another.

The moral dilemma with Preneed

Now let’s pose this question, if Preneed makes the worst day of someone’s life a little easier, but you may experience less profit by telling them, are you obligated to tell them? Does it make you a bad person if you don’t?
How do you view Preneed? Is it a necessary part of your business or a necessary evil? Is it an opportunity or obligation? Is it important enough to have a definitive, measurable process, like at-need?  Is it a focus of your business or a by-product of people walking through your door? 

How do families in your community view Preneed? If you asked 10 random people walking down the street in your community if they knew what Preneed was, how many of the 10 would know what it is and the benefits it provides?
Have you ever had a family who you have prearranged, prefunded, and served at-need tell you they wished they had not prearranged and prefunded? If not, shouldn’t you be telling everyone in your community?
By not telling your families about preneed, you are deciding for them. Don’t do this. Tell them and let them decide for themselves.

A funeral director’s responsibility

Do you believe that telling families about something that makes the worst day of their lives a little easier is a responsibility you have as a moral funeral director or moral preneed professional?
Have you ever thought of Preneed this way? Do you believe Preneed is more of a “bus stop” or “trolley car” decision?
After 32 years as a Preneed professional, I’m more adamant than ever that the question is not “should you?” but “how should you?” be educating your families on an option that makes the worst day of their lives a little easier.
The other half of the moral dilemma with Preneed is by educating families you may experience less profit. This occurs when the benefit available at death in your funding vehicle is less than your charges if you would have performed that service at-need. This is commonly referred to as a “shortfall.”
But considerations aside from the funding vehicle should affect your decision:

Shortfall risk vs. cremation

Do you believe prearranging “slows down” the effects of cremation? In other words, if the cremation rate is less today than it will be in five years, doesn’t it make sense that prearranging people today will result in less cremation services than there would be without it? For example, if you prearrange 10 people today and five choose some form of cremation, doesn’t it make sense that, if you wait, the number of people choosing cremation at-need will be greater when the cremation rate is greater?
Have you ever looked at your Preneed cremation rate and compared it to your at-need cremation rate? How many of your at-needs (that were Preneed) would have been cremation if not prearranged? This is difficult to quantify, but it’s another benefit of preneed.

Shortfall risk vs. losing or gaining a family

By proactively educating families prior to a death, you have a better opportunity to serve that family — and not see them in the obits with another funeral home name. Do you know how many “new” families your Preneed program has brought to your funeral home?

Shortfall risk vs. overhead

Any additional call your Preneed program brings to the funeral home, above the case volume you used to calculate your overhead, doesn’t have any fixed overhead assigned to it. In other words, if you assign your overhead to 100 calls and your preneed program brings in four more calls, you do 104 calls, but you do not have the fixed cost on the four calls, only the variable costs. Consequently, you make considerably more profit. Wouldn’t this go a long way to offset any reduction in profits from shortfalls on your other preneed business?
Morally, does the risk of making less profit by telling someone something that will help them make it okay not to tell them?

Preneed audit

Have you completed a Preneed audit to see how your funding product is doing? It involves using a simple Excel tool that allows you to see if all your Preneed families died today, what would your claim check look like versus if they were all at-need cases? Completing a policy-by-policy audit and aggregating the totals will help you see where you are.

What kind of funeral director do you want to be?

I have imagined a commercial that shows two families at a picnic. Both families, through greetings and natural pleasantries, realize that they both just experienced the loss of a parent. Each family expresses its condolences to the other family. The first family, who had been educated on the benefits of prearranging and prefunding their father’s funeral, explains how thankful they were that they knew they did just what Dad wanted. The other family, who was not given the opportunity to prearrange and prefund, looks confused and states how difficult it was for them because they had to guess what Mom wanted, which resulted in a sibling dispute. After further conversation, this family discovers no one told them they had the option to take care of things ahead of time.
Now ask yourself, which family’s funeral director do you want to be?

The views and opinions expressed are those of the author and do not necessarily reflect the official policy or position of American Enterprise Group or its subsidiary, Great Western Insurance Company. This article may contain links to third party websites, but Great Western Insurance Company is neither responsible nor liable for their content, accuracy, or security. Review our Terms and Conditions to learn more.
Photo credit: iStock

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