Pre-planning and pre-paying are two different decisions, and the funeral industry has spent decades blurring them. Writing down what you want costs nothing and helps your family enormously. Handing over money years in advance is a financial transaction with rules, costs and a cancellation penalty, and it deserves to be read like one.
This page explains the second decision using the state's own consumer rules. It is informational: we are not selling you a prepaid contract on this page, and the section at the bottom says plainly where we stand.
Who regulates prepaid funerals in Texas?
Three different agencies, which is why complaints so often go to the wrong one and sit there.
| If the problem is about | The agency is | Authority |
|---|---|---|
| The prepaid contract itself — the money, the trust, the permit | Texas Department of Banking | Tex. Fin. Code ch. 154; 7 TAC §§25.10, 25.11 |
| The insurance policy that funds the contract | Texas Department of Insurance | Supervises the insurers whose policies fund preneed |
| The funeral home, the director, the crematory | Texas Funeral Service Commission | Licenses funeral establishments and directors |
The Department notes that the three agencies share information and forward misdirected complaints, so a letter sent to the wrong one is not lost — but it is slowed. Send it to the right one.
One consequence worth stating out loud: selling prepaid funeral benefits in Texas requires a permit under Chapter 154. A funeral home without that permit cannot take your money for a future funeral on its own paper. That is a question you are entitled to ask, and the answer is verifiable.
Trust-funded or insurance-funded?
Every Texas prepaid contract is one or the other, and a seller may offer both. They differ in how the money is held, how it is taxed, and — the part that matters most — what you get back if you cancel.
| Trust-funded | Insurance-funded | |
|---|---|---|
| Where the money goes | An interest-bearing restricted bank account or formal trust at a Department-approved financial institution | A life insurance policy on the beneficiary, issued by an insurer regulated by TDI |
| Deposit deadline | The permit holder must deposit within 30 days of receipt | The insurer issues or denies coverage within 30 days of you signing |
| What the seller may keep | 50% of each payment, up to 10% of the total contract price, for selling and administrative expenses | Commission is built into the policy rather than disclosed as a percentage |
| If you cancel | Amount paid in less 10% of the total face value, in most cases | The policy's cash surrender value |
| Accrued earnings on cancellation | 50% of net accrued earnings if sold after 1 Sep 2001 and outstanding over a year | Not applicable — growth sits inside the policy value |
Read the trust row again. On a $10,000 trust-funded contract, that 10% is a thousand dollars, and it is the seller's whether the contract runs thirty years or eight months. It is not a hidden fee — it is disclosed state-wide policy — but very few families are told the number in dollars before they sign.
Guaranteed or not guaranteed?
A guaranteed contract fixes the goods and services at today's prices. The Department states it plainly: if payments are current and any remaining balance is paid before the service, "the provider must deliver the guaranteed funeral goods and services" at no additional cost. That is the real value of prepaying — it is inflation protection, not an investment.
A non-guaranteed contract does not lock the price. Your money grows, and at the time of need it is applied against whatever the price then is; the family pays the difference. Both are legal. Only one of them does what most people think they are buying. Ask which one you are being offered, and get the answer in writing.
Can you cancel? Yes — here is exactly how
This is the section most providers would rather you skipped.
- Give written notice to the seller. The right to cancel does not depend on the seller agreeing.
- The seller sends you cancellation forms, which you complete and return.
- The seller has 30 days from receiving your completed forms to refund the cancellation benefit.
The cancellation benefit is the number from the table above: cash surrender value for an insurance-funded contract, or paid-in less 10% of total face value for a trust-funded one, plus half the net accrued earnings where the post-2001 rule applies and the contract has been outstanding more than a year. Contracts sold before 1 September 2001 carry no entitlement to accrued earnings at all.
One trap: changing your selections means cancelling and rewriting. If you want to swap the casket or add a service later, the original contract must be cancelled and a new one entered into — which means the cancellation benefit applies to the old one and the new one is priced at today's prices. Ask what that would cost before you assume a plan is flexible.
What if you move away from Texas?
The Department's answer is blunt and worth knowing before you retire somewhere else: if the beneficiary dies a significant distance from the contracted funeral provider, the family pays the cost of transporting the deceased back to that funeral home. The family can instead choose a local funeral home — which raises the question of what happens to the money already paid, and that turns on the contract's terms.
If a move is even possible in your future, ask about portability before you sign, not after.
Twelve questions to ask any provider before you sign
Take this list to whichever funeral home you are considering, including this one. A good provider will answer all twelve without hesitating.
- Do you hold a Chapter 154 permit from the Texas Department of Banking? May I see it?
- Is this contract trust-funded or insurance-funded?
- Is it guaranteed or non-guaranteed? Show me where the contract says so.
- What exactly is guaranteed, and what is not — including cash advance items?
- In dollars, what would I get back if I cancelled tomorrow?
- In dollars, what would I get back if I cancelled in ten years?
- Which financial institution holds the trust?
- What happens if I move out of the area?
- What happens if your business is sold or closes?
- What happens if my family wants something different at the time of need?
- May I have the General Price List and the contract to read at home before signing?
- Is there any part of this I cannot cancel?
Question eleven is not optional courtesy — the FTC Funeral Rule gives you the right to a written price list to keep. Our Funeral Rule rights page sets out the rest of what that federal rule guarantees you.
Where we stand
Plainly, because you should not have to work it out from the small print: our Chapter 154 pre-need permit is in process. Until it is issued, any pre-need arrangement we make with a family is coordinated through a licensed third-party trustee, and we tell every family that before anything is signed.
What we do offer today costs nothing and carries no contract: sitting down and writing the plan out — the disposition, the service, the readings, the people to call — so your family is not guessing. A pre-planning consultation with us is $0, and you leave with a copy. Our prices are published: $1,750 for direct cremation, $4,995 for a memorial service, from $6,350 for a traditional funeral, all on our price list.
If you want to compare pre-planning with arranging at the time of need, we wrote that out at pre-plan versus at-need. If you are weighing a plan against simply saving the money, read funeral insurance versus savings.
Frequently asked questions
Who regulates prepaid funeral contracts in Texas?
The Texas Department of Banking, under Texas Finance Code Chapter 154 and Title 7, Sections 25.10 and 25.11 of the Texas Administrative Code. The Texas Department of Insurance regulates the insurers whose policies fund insurance-funded contracts, and the Texas Funeral Service Commission licenses the funeral homes and directors.
Can I cancel a prepaid funeral contract in Texas?
Yes. You cancel by giving written notice to the seller. The seller then sends cancellation forms, and once you return them completed the seller has 30 days to refund the cancellation benefit.
How much money do I get back if I cancel?
On an insurance-funded contract, the cash surrender value of the policy. On a trust-funded contract, in most cases the amount paid in less 10% of the total face value. Contracts sold after 1 September 2001 also entitle the purchaser to 50% of the net accrued earnings if the contract has been outstanding more than one year and its terms were complied with.
Where does my money sit on a trust-funded contract?
In an interest-bearing restricted bank account or formal trust account at a financial institution approved by the Department. The permit holder must deposit it within 30 days of receipt, and may keep 50% of each payment you make, up to 10% of the total contract price, for selling and administrative expenses.
What is a guaranteed prepaid contract?
One where the goods and services are fixed at today's prices. If payments are current and any remaining balance is paid before the service, the provider must deliver the guaranteed goods and services at no additional cost. A non-guaranteed contract does not lock the price and the family pays the difference at the time of need.
What happens if I move away from Texas?
If the beneficiary dies a significant distance from the contracted funeral provider, the family pays the cost of transporting the deceased back to that funeral home. The family can instead choose a local funeral home. Ask about portability before signing.
Can I change what is in the plan later?
Changing the selections means the original contract is cancelled and a new one is entered into. The cancellation benefit applies to the old contract and the new one is priced at current prices, so ask what that would cost before assuming a plan is flexible.
Do you sell prepaid funeral contracts?
Our Chapter 154 pre-need permit is in process. Until it is issued, any pre-need arrangement is coordinated through a licensed third-party trustee, and we tell every family that before anything is signed. Writing your plan down with us costs nothing and involves no contract.
Talk it through first
Call (214) 550-7369 and ask for a pre-planning conversation. It is free, nobody will ask you for money on that call, and you will leave with your wishes written down — which is the part that actually helps your family, whoever ends up serving them.