Which contract type restricts refunds of funds?

• A. Revocable funded preneed contract
• B. Standard preneed contract
• C. Irrevocable funded preneed contract
• D. Perpetual care agreement

Answer: (C)

The situation is about who controls the funds in a preneed arrangement. When money is placed into a funded preneed contract and the contract is irrevocable, the purchaser gives up the right to reclaim those funds. The money is placed in a trust or otherwise dedicated to satisfying the specific funeral services, so refunds aren’t available to the buyer. That restriction on withdrawing funds is what makes this contract type the one that limits refunds.

In contrast, revocable funded plans let the purchaser reclaim the money or cancel the contract, so refunds are possible. A standard preneed contract generally follows its own terms, which may allow refunds under certain conditions. A perpetual care agreement is tied to cemetery upkeep and isn’t primarily about restricting refunds of preneed funds for services.