Arkansas State Board of Embalmers and Funeral Directors Service Laws, Rules, and Regulations (LRR) Practice Exam

What must all contracts for the sale of prepaid funeral benefits include?

1. A description of merchandise and services

2. Details of the seller's business location

3. Proof of insurance coverage

4. A list of competitors in the area

The correct answer is: A description of merchandise and services

All contracts for the sale of prepaid funeral benefits must include a description of merchandise and services. This requirement ensures that consumers are fully informed about what they are purchasing. The description provides transparency regarding the specific items and services that will be provided at the time of need, such as caskets, urns, and memorial services. This clarity is crucial for consumers to make informed decisions and to understand exactly what their prepayment covers, which protects both their investment and their rights. While details about the seller's business location and proof of insurance coverage can be important aspects of a funeral contract, they are not universally mandated as fundamental requirements for the contract itself in the context of prepaid funeral benefits. A list of competitors is not pertinent to the necessary contractual elements and does not enhance the consumer's understanding of their specific purchase.