- The Washington Times - Saturday, April 22, 2006

HAGERSTOWN, Md. — A dollar a death.

That’s the cardinal rule of the Hub City Burial Association, which collects the money from its members and disburses it to their survivors to help defray funeral expenses.

Hub City is among a declining number of such clubs in Hagerstown and nearby communities in Western Maryland, West Virginia and Pennsylvania that offer a simple form of insurance dating at least to ancient Rome.

In the United States, burial associations were formed by blue-collar workers in the Northeast and black communities in the South, starting in the late 1800s. They survive in various formats and under varying degrees of regulation among people who hope to give their survivors a little more financial security.

“This is simply a vehicle for a beneficiary to have some extra money to apply to the funeral or cemetery or to buy a marker,” said James F. Powers, secretary-treasurer for Hub City, started in 1945 by workers for the now-defunct Western Maryland Railway. Numerous railroads once ran through the Western Maryland city, making it a regional transportation hub.

The concept is simple: New members pay $4 to join the association plus $1 for the burial fund. Every time a member dies, the amount in the burial fund is sent to his or her designated beneficiary. Each surviving member is then billed $1 to replenish the fund. Members also pay a $4 annual membership fee to cover the association’s costs.

The Hub City group is limited to 999 members by federal rules governing its nonprofit status. Decades ago, it had a waiting list of people drawn by the promise of a $999 death benefit, which would cover much of their funeral costs, said Anne Hamilton, 87, the association’s president.

But membership has dwindled to 481, making the potential payout less attractive to people schooled by estate planners to prepare for funeral costs approaching $10,000.

The lengthening life span of modern Americans also works against burial associations. At some point, one’s annual dues and $1 contributions will total more than $999, a fact that keeps some prospective members from joining and has prompted others to drop out.

In a rebuilding effort, Hub City and the Potomac Burial Association, a club with fewer than 600 members in nearby Hancock, recently raised their top age limit for membership from 65 to 75.

Betty Beeler, secretary-treasurer of the Potomac group, suggests that people join in their 50s or 60s. “I don’t recommend that somebody join when they’re a teenager because you’re paying for a lot of years,” she said.

Still, some join at relatively young ages, more out of a sense of tradition than logic, Mrs. Beeler said.

Neither the Potomac nor the Hub City club is aligned with a funeral home or operated by an insurance company — factors that have prompted complaints and restrictions on burial associations in other states. Arkansas and Tennessee require them to be licensed. New Hampshire prohibits them.

The Maryland Insurance Administration wasn’t aware of the burial associations, spokeswoman Darlene Frank said. But, she said, “insurance is a transference of risk, and it does sound like this should qualify as insurance and be regulated.”

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