Are you worried about losing families to competitors, unpredictable revenue, or the rising costs of running your funeral home? You’re not alone.
In today’s rapidly changing funeral profession, an active preneed program isn’t just a “nice-to-have.” It’s the key to protecting your business’s future.
To help you cut through the noise, we sat down with two of our trusted preneed sales and marketing experts for advice and insights.
Meet our experts:
Todd Carlson – EVP of Sales and Chief Sales Officer for Funeral Directors Life and Passare, with more than 30 years in the funeral profession.
Paul Lovelace – EVP of Corporate Development for Funeral Directors Life, specializing in building active and profitable preneed programs.
Below are 9 common preneed questions funeral professionals are asking, and clear answers you can trust and share with your funeral home.
Short answer: You can’t assume you’ll serve every family in the future. An active preneed program secures relationships before competitors do.
Todd: Families are more informed and have more choices than ever. They’re not just looking for a funeral home when there’s a death. They’re researching, comparing, and making decisions well in advance. An active preneed program with field support and marketing helps you build trust early, so your funeral home is the first one families think of when a death occurs. Without it, you’re leaving the door open for competitors.
Paul: Relying on the idea that “We’ll serve them someday” is risky. Preneed transforms that hope into a documented and funded commitment. It means the family has chosen you, set aside funds, and made their wishes clear. Without preneed, you’re depending on memory and emotion during a stressful time, and when families are most likely to shop around or be influenced by online options.
Takeaway: Preneed locks in the relationship with families, protecting your opportunity to serve your community tomorrow.
Short answer: Preneed adds stability, future cases, and long-term value to your business.
Todd: The biggest advantage of having a preneed program isn’t predicting exactly when revenue will come in. You can’t know that. The value is knowing you have future funerals in your file cabinet, and when those services occur, they’re already paid for or well on their way.
That means:
You have families committed to your funeral home.
Many of those funerals are pre-funded.
You’re building deeper relationships now and strengthening your at‑need business later.
A healthy preneed program also supports succession planning by adding visible future business to your firm.
Paul: I see preneed as a stabilizer and a value driver. A strong preneed program:
Helps offset declining at‑need calls and rising competition.
Reduces bad debt and improves cash flow.
Helps maintain or grow your average funeral size by giving families the funeral they want and not just the one they can afford.
Makes your funeral home more attractive to buyers because they can see a pipeline of funded future funerals.
Often, the difference between a funeral home that’s growing and one that’s plateauing is the strength and activity level of its preneed program.
Takeaway: Preneed is one of your best tools for building future cases, stabilizing cash flow, and increasing the long‑term value of your funeral home.
Short answer: Ignoring preneed means quietly losing market share and making your business harder to manage.
Todd: The biggest risk is that you lose future business before it ever reaches you. We call it the “iceberg effect.” With an iceberg, most of the volume is hidden below the waterline. You only see the tip. It’s the same with preneed. You can’t see how big your competitor’s file cabinet is until those preneed contracts start converting to at‑need calls. That part is above the waterline. By the time you see a family’s obituary on a competitor’s website, it’s too late.
A passive or non‑existent preneed program means you have no idea how much future business is already quietly committed to someone else.
Paul: Financially, ignoring preneed is like running a business with no pipeline. You’re dependent on unpredictable at‑need demand, which leads to big swings in revenue and cash flow.
Funeral homes with weak preneed programs often:
Appraise lower than similar firms with strong preneed programs
Spend more on marketing just to keep up
Still lose market share to more proactive competitors
Takeaway: Without a strong preneed program, you’re vulnerable to the “iceberg effect” and may be losing more future business than you realize.
Short answer: Growth matters, but the bigger concern is how your preneed strategy supports future revenue and average funeral size.
Todd: It’s normal to ask, “What’s the growth rate on my preneed policies?” But there usually isn’t a single, fixed rate you can count on forever. Growth can change over time and isn’t always guaranteed.
The more important questions are:
How is my preneed program helping secure future revenue?
Is it helping families plan the funerals they truly want, not just what they can afford?
Is it supporting or increasing my average funeral size as my costs rise?
When your preneed strategy is right, it helps you protect and grow the value of each future service.
Paul: I encourage owners to check with their preneed providers annually to understand how new and in‑force businesses are performing. But policy growth is only part of the picture. You also need to consider:
How growth interacts with your pricing
How commissions, premiums, and product design support your goals
How your provider helps you grow your overall preneed program, not just your existing block
Your goal shouldn’t be to just secure a higher rate on paper. Your preneed strategy supports where you want your funeral home to be in 5, 10, or 20-plus years.
Takeaway: Don’t stop at the growth rate. Look at how your preneed program supports future revenue, average funeral size, and your long‑term goals.
5. What should I know about preneed shortfalls?
Short answer: Shortfalls matter, but they need to be viewed in the context of your overall strategy.
Todd: A preneed shortfall occurs when the policy or trust's value doesn’t cover the promised services at the time of need. Inflation and rising costs for staff, merchandise, and overhead are usually to blame. If your funding doesn’t keep up, your funeral home makes up the difference, which eats into your margins.
That said, it’s not always as simple as “Zero shortfalls are always best.” Some owners are comfortable with small, manageable shortfalls if their preneed product’s blend of growth, commissions, and premiums supports their broader strategy. This is especially true when they reinvest commissions into sales, marketing, and field support that grow market share and average contract size.
Paul: Even small shortfalls add up over time, so they need attention. But you have to look at the full picture. If your preneed structure helps you grow total case volume and average funeral size, your overall profit can still increase. And if you use commissions to fund lead generation, training, and support, a modest and controlled shortfall might be an acceptable trade‑off.
The key is alignment. Your preneed program should align with your goals, your tolerance for shortfalls, and how you plan to invest the commissions and growth they generate.
Takeaway: Understand and monitor shortfalls, but judge them in the context of your total preneed strategy and long‑term profitability.
Short answer: Guarantees can be a great sales tool when they’re priced and funded correctly.
Todd: Guaranteed contracts build trust. When you say, “We’ll guarantee these prices,” families feel more secure, and you may even see higher close rates. But guarantees are also financial promises. If your pricing and funding don’t keep up with your costs, those promises can quietly reduce your margins.
Guarantees shouldn’t be automatic. However, in states where it’s allowed, many successful funeral homes charge for the guarantee and have found families willing to pay for that level of certainty, helping protect their bottom line.
Paul: If you’re in a state that welcomes it, I recommend breaking down your offerings into guaranteed and non-guaranteed items:
Guaranteed items give families price certainty but move inflation risk to you.
Non‑guaranteed items protect your margin but may introduce more variability for the family.
Many firms use a blended approach and, when structured well, guarantees can serve both the family and your funeral home.
Takeaway: Offer guarantees thoughtfully and price them so you can serve families well without sacrificing your margins.
Short answer: Both can work. The right choice depends on your goals, regulations, and comfort with risk.
Todd: Both preneed insurance and preneed trusts can be excellent tools. Preneed insurance isn’t always more straightforward, and growth isn’t always more predictable. In some states, preneed trusts are simply certificates of deposit, which are very predictable.
At the same time, preneed insurance offers important advantages. If a consumer dies while still making payments, the policy can still provide the full benefit (according to the policy’s terms). That protects families from being caught in the middle of a payment plan.
Paul: Instead of asking, “Which is better?” ask:
Funeral homes with weak preneed programs often:
What does my state allow or require for preneed funding?
Where do I have control over, and where do I not have control over, trust investments?
How much investment and interest‑rate risk am I willing to carry?
Also, remember that many trust accounts are transferable, like insurance. For most funeral homes, the best answer is a thoughtful mix of preneed insurance and trust funding that fits their regulations and long‑term strategy.
Takeaway: There isn’t a universal best. Work with a knowledgeable advisor to design the right blend of preneed insurance and trust funding for your funeral home’s preneed program.
Short answer: Neither stands alone. Your preneed product choices should line up with your funeral home’s business goals.
Todd: I don’t look at this as “growth vs. commissions.” Both are important, but only when you see them as part of your overall business plan. Some funeral home owners need higher commissions now so they can invest in field support, sales staff, and marketing that will grow their preneed program and market share. Others put more weight on long‑term growth in their preneed program because of their goals and resources.
The important piece is alignment, not blindly picking one over the other.
Paul: When I meet with an owner, we start with their goals:
Do you want to aggressively grow market share?
Do you need cash flow today to invest in your people and your brand?
Are you preparing to sell or transition the business?
Then we look at how growth, commissions, and premiums can work together to support those goals. That’s where a trusted preneed advisor can help you see the bigger picture beyond a single commission rate.
Takeaway: Don’t chase growth or commissions alone. Choose preneed products that match your overall preneed goals and business strategy.
9. How do I get started with a successful preneed program?
Short answer: Treat your preneed program as a core part of your business that is built on great service, strong partners, and consistent follow‑through.
Todd: Every strong preneed program starts with an excellent at‑need experience. If families don’t love how you serve them today, they’re less likely to preplan with you tomorrow.
From there:
Choose the right preneed partner with strong products, clear reporting, and real field support.
Train your staff so they’re confident explaining preneed logistics and benefits to families.
Make the process simple, so preneed becomes a natural part of how you serve families.
Add consistent marketing efforts like social media, preneed seminars, aftercare follow-up, and community events to keep your pipeline full.
Paul: I usually recommend a 4‑step framework:
Clarify your goals – market share, cash flow, business value, succession, or all of the above.
Choose partners and tools that support those goals – funding, software, reporting, and support.
Create a marketing plan that generates steady preneed leads.
Measure what matters – appointments, closes, average contract size, funding quality, and at‑need outcomes.
Treat your preneed program like any other core system in your funeral home: build it thoughtfully, review it regularly, and keep improving.
Takeaway: Structure and consistency are key. Start with great at‑need service, add the right partners and tools, then build a repeatable system around it.
Preneed: Your funeral home’s strategic advantage
The funeral profession is changing. A strong preneed program helps you:
Stabilize your business
Protect your margins
Secure your future market share
When you move your preneed program from passive to active, you protect future calls, steady your cash flow, and build deeper relationships with families long before they need you.
Whether you’re launching a new preneed program or improving the one you have, success starts with choosing a reliable preneed provider who cares about your long‑term success and not just the product.
Ready to strengthen your preneed program?
Fill out the form below to schedule a meeting with our team and get practical next steps to secure your funeral home’s future.
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