If a pre-need contract is entered into, that contract must include a statement that outlines

• A. How additional disbursements will be handled at the time of need
• B. How the amount of the contract will be determined at the time of need
• C. That the operator may retain excess funds from the investment
• D. All of the above

Answer: (B)

When a pre-need contract is made, the essential requirement is that it spell out how the contract amount will be determined at the time of need. This matters because prices for funeral services and merchandise can change between purchase and need, and the contract should make clear the method for calculating the amount due when services are needed. Without this clarity, there can be disputes over what the cost will be later, so this disclosure protects the buyer.

The other details—how additional disbursements will be handled or whether the operator may retain excess funds—may be addressed in other rules or contracts, but they are not the mandate focused on price determination at the time of need. Hence, the statement about how the contract amount will be determined at the time of need is the required one.