South Carolina Funeral Law Practice Exam

What action is prohibited for the selling provider during the transfer of a preneed funeral contract funded by an insurance policy?

1. Offering discounts on services

2. Collecting a transfer fee

3. Providing written notifications

4. Changing the terms of service

The correct answer is: Collecting a transfer fee

The action that is prohibited for the selling provider during the transfer of a preneed funeral contract funded by an insurance policy is collecting a transfer fee. In South Carolina, the law stipulates that when a preneed funeral contract is transferred, it should not involve additional financial burdens on the consumer, such as a transfer fee. This is designed to protect consumers from incurring additional costs that could deter them from transferring their contracts when necessary, ensuring that preneed arrangements can be handled in a fair and transparent manner. In contrast, offering discounts on services, providing written notifications, and changing the terms of service may not necessarily go against the regulations, provided they comply with appropriate laws and terms agreed upon in the contract. The focus on prohibiting transfer fees aims to maintain the integrity of preneed contracts and ensure that clients are not penalized for making necessary changes regarding their funeral arrangements.