preneed product

How to Choose the Right Preneed Product for Your Funeral Home

By Todd Carlson, Executive Vice President and Chief Sales Officer

Have you ever wondered if you are using the right preneed product for your funeral home?

Preneed products are not “one size fits all.” That is because your preneed product selection should align with your business strategy.

So, depending on your business strategy and typical preneed customers, you will need to select a preneed product that supports your business goals. That way, your funeral home will be set up for success.

How do I know which preneed product is right for me?

Let’s look at how a preneed product works. When your funeral home sells a preneed plan, you essentially have two levers to pull:



In general, higher-growth products pay lower commissions. Lower-growth products pay higher commissions. Some products meet in the middle.

Essentially, you can ask yourself: Do I want the benefit of commission dollars upfront, or do I want more growth on my preneed business at claim time?

In short, do you want to be paid now or in the future?

Let’s look at three different business strategies and dive into the pros and cons of each, so you can feel confident making the right decision for your funeral home.

Business Strategy #1: Active Sales Program

If you are running an active preneed sales program (one that utilizes a full-time licensed preneed sales professional), it likely has the following characteristics:

Lower average ages (more than 10 years on the books)

Primarily payment plans

High monthly sales volume

The best preneed product for this strategy

If you have an active preneed sales program, the best product for this strategy is one that offers higher commission rates offset by lower growth rates. Higher commissions allow your sales professionals to make a living selling preneed plans for your funeral home full time. In addition, up-front commissions provide revenue to pay for marketing and lead generation expenses.

The pros and cons of this strategy

PRO: Consistent marketing, lead generation, and community-based events promoting your funeral home, which will grow your market share over time

PRO: A significant amount of preneed business to your books, increasing the overall value of your business

PRO: At-need call volume will also increase based on marketing from an active preneed sales program

PRO: Increased profitability from additional funerals that go above and beyond the number needed to cover your fixed overhead expenses

PRO: Profit margins of each additional preneed funeral more than compensate for lower growth rates

CON: Not feasible for smaller businesses that cannot support a full-time sales professional

Want to see how an active program can change the course of a business? Read the case study below!

Read the Case Study

Business Strategy #2: Passive Sales Program

If your preneed approach is more passive (serving primarily walk-in and call-in business), then your preneed portfolio will probably look like this:

Higher average ages (less than 10 years on the books)

Mostly single-pay or dollar-for-dollar plans

Lower monthly sales volume

The best preneed product for this strategy

This type of program requires higher growth rates to offset inflation and shortfalls on plans with older average ages and single payment plans. So, the best product for a passive approach is to have a higher growth rate with lower commissions, which are not needed to support a full-time sales professional or market the preneed program.

The pros and cons of this strategy

PRO: Higher death benefit paid at claim time due to higher growth

PRO: No costs for hiring, training, and marketing

CON: Lower average contract sizes because walk-ins/call-ins are not served by an experienced preneed sales professional

CON: Loss of market share due to more active competitors locking in families with preneed

CON: Missed opportunities to grow at-need call volume due to less marketing

CON: Very little future security for the business that would come with a larger preneed portfolio

Business Strategy #3: Moderate Sales Program

If you fall somewhere in the middle with a moderately active preneed sales program, your program probably looks something like this:

Average ages (about 10 years on the books)

A mix of mostly single-pay plans with some payment plans

Moderate to high monthly volume sales

The best preneed product for this strategy

If your program is moderately active, you’ll benefit from a product that offers a balance between growth rates and commissions. This strategy makes sense if your funeral home is a smaller business or operates in a rural area. You know you want to maintain and possibly even grow your market share through an active preneed approach, but your funeral home may not be able to support a full-time sales professional on its own.

The solution? You might partner with an agency to host a few marketing events and have the sales professional from the agency follow up with attendees. Another option is to share an FDL-employed sales professional with other non-competing funeral homes in the vicinity.

The pros and cons of this strategy

PRO: Maintain or even grow market share with only a few marketing events or lead-generation campaigns per year

PRO: Higher contract averages because experienced sales professionals writing preneed contracts for you

PRO: Moderately increased at-need call volume due to increased marketing

PRO: Increased profitability from even one additional funeral that results from marketing or preneed that goes beyond the typical call volume needed to cover fixed overhead costs

PRO: Greater security for the long-term success of your business with a growing preneed book of business

CON: Sales professional may not be a good fit for your funeral home. (In that case, you can try a different approach)

So…what is your preferred business strategy?

The next big question to ask is…what is your preferred strategy? And does your current product align with your desired preneed strategy?

As you can see, each strategy has its benefits and drawbacks. The strategy you choose depends on your overall long-term goals:

Do you want to actively grow your market share with a full-time sales professional?

Do you want to focus on walk-ins and call-ins only and have a higher payout at claim time?

Do you want to maintain your current market share with a moderate approach?

Keep in mind that your current “default” strategy may not actually align with your goals!

That is why it is so important to talk to a preneed product and strategy expert, like our representatives at Funeral Directors Life (FDL).

Your FDL representative can help you understand the long-term implications for your business based on your current product and strategy. That way, you can gain clarity on what your goals are for the future and how to best meet those goals by matching your product to your preferred preneed strategy.

Simply fill out the form below to request a free consultation with your regional FDL representative.

Whether or not you choose to do business with FDL, you will be able to make informed decisions about your business that will help you meet your goals for the future!

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