New Jersey Mortuary Science Practice Exam

What option is NOT provided to purchasers of prepaid funeral agreements after a notice of bankruptcy is given?

1. Transfer their prepaid agreements to another registered mortuary

2. Sever funding of a funeral insurance policy from the prepaid agreement

3. Change the name on the agreement without penalty

4. Receive a refund on their prepaid agreements

The correct answer is: Change the name on the agreement without penalty

The option that is not provided to purchasers of prepaid funeral agreements after a notice of bankruptcy is the ability to change the name on the agreement without penalty. In the context of prepaid funeral agreements, this option may not be typically offered due to the complexities and legal ramifications involved in altering such contracts after a bankruptcy notice has been issued. Changing the name on a prepaid agreement can have implications for the fiduciary responsibilities and financial obligations initially set out in the contract. In bankruptcy situations, alterations to contracts might complicate the liquidation process or the distribution of assets, making it less likely for such name changes to occur without penalties. In contrast, purchasers of these agreements do have other options available to them despite the bankruptcy notice, such as transferring their agreements to another registered mortuary or receiving a refund, subject to specific conditions outlined in the agreements and state regulations. Severing funding from a funeral insurance policy, while less common, might also be a viable option, providing some flexibility amidst the bankruptcy proceedings. Overall, the restrictions placed on changing the name without penalty reflect the legal and financial precedents surrounding prepaid funeral agreements during bankruptcy situations.