South Carolina Funeral Law Practice Exam

What fee must the selling provider receive when transferring a preneed funeral contract?

1. 5 percent of the contract face amount

2. 10 percent of the contract face amount

3. 15 percent of the contract earnings

4. No fee is required

The correct answer is: 10 percent of the contract face amount

The requirement for a selling provider to receive a fee during the transfer of a preneed funeral contract is set at 10 percent of the contract face amount. This regulation ensures that there is a standardized fee for providers who facilitate the transfer of these contracts. The fee serves various purposes, including compensating the provider for the administrative work involved in transferring the contract and ensuring that the original selling provider is fairly compensated for the services they initially provided. This fee system is designed to create a balance in the funeral service industry, helping providers sustain their businesses while also maintaining consumer protection. It encourages compliance with the regulations governing the sale and transfer of preneed funeral contracts, ensuring transparency and fairness in transactions. Thus, the correct answer emphasizes adherence to these established guidelines.