What is included in the formal statement required for irrevocable contracts?

The correct answer is that the principle and interest are non-refundable. In Tennessee, irrevocable contracts for funeral services require a formal statement that clearly outlines the terms of the contract, particularly emphasizing that the funds deposited, along with any interest accrued, cannot be refunded once the contract is executed. This provision is essential for ensuring that consumers are fully aware of the binding nature of these contracts and the implications for their financial commitments.

Irrevocable contracts are designed to provide peace of mind regarding future funeral arrangements without the risk of losing the investment. Thus, when individuals enter into such contracts, it is crucial that they understand the permanence of their decisions and the non-refundability of the financial aspects involved in the arrangement. This clarity helps to protect both the consumer and the funeral home, as it establishes a mutual understanding of the contractual obligations.

The other choices do not accurately reflect the requirements for irrevocable contracts. For instance, stating that the contract can be revoked at any time contradicts the definition of an irrevocable contract. Likewise, stating that the contract is subject to annual review or that the director must approve any changes misrepresents the nature of such agreements and their specific stipulations.