How should cash disbursements be treated in a guaranteed pre-need contract?

In a guaranteed pre-need contract, cash disbursements refer specifically to the expenses that are directly related to the services and products promised in the contract. These disbursements should not be included in the contract itself. This is because the nature of guaranteed pre-need contracts is to lock in the price of services and products at the time the agreement is made, providing consumers with assurance against inflation and price increases.

By excluding cash disbursements from the contract, it ensures that the focus remains on the guaranteed items and prices outlined in the agreement. This helps to eliminate confusion and potential disputes regarding what costs are covered under the contract. It also places the responsibility of any additional costs outside of the guaranteed services on the parties involved, allowing for clear financial expectations.

Including disbursements in the contract could lead to legal complications, as it may imply that the funeral service provider is responsible for additional costs, which contradicts the principal purpose of such contracts. Hence, treating cash disbursements as not placed within the guaranteed pre-need contract is the correct approach.