Preneed shortfall calculator
Guaranteed-price preneed contracts promise today’s families yesterday’s prices. This calculator estimates how far the money set aside has kept up with the cost to deliver those services now.
Preneed shortfall estimator
Re-prices guaranteed-price contracts at today’s cost and compares them to the money actually set aside. Rung 4–5 of the Preneed Reconciliation Ladder.
From current trust statements and insurer confirmations.
Leave at 100 to compare to full retail; some buyers measure against cost to deliver.
Educational estimate only. Not an appraisal, valuation opinion, or loan approval.
What the calculator does
It grows the original contract prices of your guaranteed contracts by your average annual GPL increase over their average age, giving an estimate of what those obligations would cost to deliver at today’s prices. It then compares that figure to the current funded value from your trust statements and insurer confirmations. The difference is the shortfall or surplus, and the ratio is the preneed funding ratio used in the Four-Number Funeral Home Valuation Screen.
Where the inputs come from
Original contract prices come from the preneed contract register. Funded values must come from current trust statements and insurance company confirmations, not from internal ledgers. The average GPL increase can be calculated from your price lists over the past several years. If your backlog includes non-guaranteed contracts, leave them out: those families pay any difference at the time of need.
Why buyers care
A buyer who takes over guaranteed contracts must deliver the promised goods and services for the amount funded. If the funding is short, the buyer absorbs the gap on every future case. Most buyers deduct the estimated shortfall from the price or hold it back in escrow. The Preneed Reconciliation Ladder is the full method behind this estimate.
Limits of the estimate
Averages hide detail. A few large contracts written decades ago can drive most of the shortfall. Some buyers measure against their own cost to deliver rather than full retail, which reduces the gap; the cost field lets you test that. State trusting rules, trust investment returns, and insurance growth rates all vary, so a contract-by-contract reconciliation is the only number a buyer will accept at closing.