What is a requirement if the life insurance policy proceeds exceed the actual cost of goods and services?

When the life insurance policy proceeds exceed the actual cost of goods and services provided by the funeral home, the requirement is that the excess must be paid to the estate of the beneficiary. This is a key aspect of ensuring that beneficiaries are treated fairly, and it aligns with the responsibilities of funeral directors to uphold ethical practices when handling funds related to final arrangements.

This requirement helps safeguard the interests of the deceased's estate and ensures that any additional funds beyond the funeral costs do not unjustly benefit the funeral provider. By directing the excess funds to the estate, it allows those funds to be distributed according to the wishes of the deceased as outlined in their estate plan or applicable laws.

If the excess were to be retained by the seller, donated to charity, or kept in a reserve account, it would not fulfill the obligation to provide rightful ownership and control of the funds back to the estate, which is fundamental in estate management and ethics in the funeral service profession.