Got Questions? We’ve Got Answers. Understanding insurance and financial planning can feel overwhelming, but we’re here to help. Our FAQ section covers common questions about life insurance, annuities, retirement planning, and more—so you can make informed decisions with confidence.
Annuity FAQs
A true bonus is an upfront percentage added to the account value, meaning it is real money that can be withdrawn under the terms of the contract. A benefit base bonus, on the other hand, is only used to calculate future income and does not increase the actual account value available for withdrawal.
Annuities grow tax-deferred, meaning you do not pay taxes on gains until you withdraw funds. Qualified annuities (funded with pre-tax dollars, such as from an IRA or 401(k)) are taxed as ordinary income upon withdrawal. Non-qualified annuities (funded with after-tax dollars) are subject to taxes only on the gains, while the principal portion is returned tax-free.
A SPIA provides immediate, fixed income payments in exchange for a lump sum, with no access to the remaining principal. A GLWB rider, available on deferred annuities, allows income withdrawals while keeping the remaining principal accessible, providing flexibility and potential for continued growth.
No, annuities are not FDIC insured. However, they are backed by the financial strength and claims-paying ability of the issuing insurance company. Each state also has a guaranty association that provides a level of protection in case of insurer insolvency.
Many annuities have no fees unless optional features, such as income riders or enhanced death benefits, are added. Fees can enhance benefits and growth potential, but it is important to understand that some fees, such as those for riders, are deducted even if the annuity earns zero returns.
Yes, most annuities offer a death benefit that ensures any remaining account value is passed on to beneficiaries. Some contracts include enhanced death benefit options for an additional cost.
Surrender charges apply if you withdraw more than the penalty-free amount within the contract’s surrender period, typically ranging from 3 to 10 years. These charges decrease over time and eventually disappear.
Annuities pay commissions to the agent, but they do not come out of your investment. The insurance company pays the commission separately, ensuring that 100% of your funds go into the annuity.
No, lifetime income guarantees ensure that payments continue for the rest of your life, even if your account value reaches zero.
Many advisors focus on assets under management (AUM) and may not offer annuities because they don’t generate ongoing advisory fees. Additionally, there are misconceptions about annuities being expensive or complex, though modern annuity products offer competitive benefits and flexibility.
Burial Insurance FAQs
Burial insurance, also known as final expense insurance, is a type of whole life insurance designed to cover end-of-life expenses such as funeral costs, medical bills, and other outstanding debts.
Coverage amounts typically range from $2,000 to $50,000, depending on your needs. The amount should be enough to cover funeral expenses, burial or cremation costs, and any final medical or legal expenses.
Burial insurance is a smaller whole life policy intended specifically for end-of-life expenses, whereas traditional life insurance (term or whole life) can provide larger death benefits for income replacement, debt repayment, or legacy planning.
No, most burial insurance policies do not require a medical exam. Approval is typically based on a few health questions, and some policies offer guaranteed acceptance with no health questions at all.
- Level Benefit: Offers full coverage from day one and is typically available to those in good health.
- Graded Benefit: Pays a partial benefit if death occurs within the first 2-3 years, then full benefits after that period.
- Guaranteed Issue: No health questions, but a waiting period (usually 2-3 years) before full benefits are paid.
No, burial insurance policies have fixed premiums that never increase, regardless of age or health changes.
Yes, you can buy burial insurance for a family member, such as a parent or spouse, as long as you have their consent and an insurable interest.
No, burial insurance benefits are paid out tax-free to beneficiaries. However, if the payout goes to an estate instead of a named beneficiary, it may be subject to estate taxes.
Most insurers process and pay claims within a few days to a few weeks after receiving the required documentation, making it a reliable way to cover funeral costs quickly.
Yes, beneficiaries can use the payout for any purpose, including medical bills, debts, or even living expenses. The funds are not restricted to funeral costs unless specified by the policyholder.
Long Term Care Insurance FAQs
Long-term care (LTC) insurance helps cover the costs of extended care services that are not covered by Medicare or traditional health insurance, such as assistance with daily living activities (bathing, dressing, eating, etc.) in a nursing home, assisted living facility, or at home.
The ideal time to purchase LTC insurance is in your 50s or early 60s when premiums are lower and you are more likely to qualify for coverage. Waiting too long may result in higher costs or denial due to health conditions.
LTC insurance covers a range of services, including:
- Home health care
- Assisted living facilities
- Nursing homes
- Adult day care
- Hospice care
- Memory care for Alzheimer’s and dementia patients
No, Medicare only covers short-term skilled nursing care following a hospital stay and does not pay for custodial care (help with daily activities). Medicaid may cover long-term care, but only for individuals who meet strict income and asset requirements.
The cost depends on factors such as age, health, coverage amount, benefit period, and inflation protection options. Premiums generally increase with age and can range from a few hundred to several thousand dollars per year.
- Traditional LTC Insurance: Provides stand-alone long-term care benefits but has “use it or lose it” risk if benefits are never used.
- Hybrid LTC Insurance: Combines LTC coverage with a life insurance or annuity policy, ensuring that if LTC benefits are not used, the policyholder’s beneficiaries receive a death benefit.
It depends on the severity of the condition. Some insurers may approve coverage with higher premiums, while others may decline applicants with significant health issues. Applying while healthy increases the likelihood of approval.
The elimination period is the waiting period before benefits begin, usually ranging from 30 to 180 days. During this time, the policyholder is responsible for covering care costs. Longer elimination periods typically result in lower premiums.
Yes, insurance companies can raise premiums on existing policies if they receive state approval and can demonstrate the need for an increase due to higher-than-expected claims. Hybrid LTC policies, however, typically have guaranteed premiums.
For those who want to protect their assets and avoid burdening family members with care costs, LTC insurance can be a valuable investment. Without coverage, individuals may have to rely on personal savings, family assistance, or Medicaid for care expenses.
Medicare FAQs
Medicare is a federal health insurance program for individuals aged 65 and older, as well as some younger individuals with disabilities or End-Stage Renal Disease (ESRD). It consists of different parts covering hospital care, medical services, and prescription drugs.
- Part A (Hospital Insurance) – Covers inpatient hospital stays, skilled nursing facilities, hospice care, and some home health care.
- Part B (Medical Insurance) – Covers doctor visits, outpatient care, preventive services, and some home health care.
- Part C (Medicare Advantage) – A private insurance alternative to Original Medicare that often includes additional benefits like vision, dental, and prescription drug coverage.
- Part D (Prescription Drug Coverage) – Helps cover the cost of prescription medications.
Medicare Part A is usually premium-free if you or your spouse worked and paid Medicare taxes for at least 10 years. Part B, Part C, and Part D all have premiums that vary based on income and the plan you choose.
Original Medicare (Parts A & B) is provided by the federal government and allows you to see any doctor that accepts Medicare. Medicare Advantage (Part C) is offered by private insurance companies and often includes extra benefits, but it may have network restrictions.
The Initial Enrollment Period (IEP) is a 7-month window starting 3 months before your 65th birthday, including your birth month, and ending 3 months after. There are also Special Enrollment Periods (SEPs) for certain situations, and the General Enrollment Period (GEP) from January 1 to March 31 each year.
If you delay enrolling in Part B or Part D without qualifying for a Special Enrollment Period, you may face permanent late enrollment penalties, resulting in higher premiums for life.
Medicare does not cover long-term care (such as nursing home stays or custodial care) beyond a limited number of days in a skilled nursing facility after a qualifying hospital stay. Medicaid or long-term care insurance is needed for extended care.
Medigap plans help cover out-of-pocket costs like copays, coinsurance, and deductibles that Original Medicare does not pay. These plans are available only with Original Medicare and are sold by private insurers.
Yes, if you are still working and have employer coverage, Medicare can work alongside it. Whether Medicare is primary or secondary depends on the size of your employer (Medicare is usually primary for companies with fewer than 20 employees).
For those who want to protect their assets and avoid burdening family members with care costs, LTC insurance can be a valuable investment. Without coverage, individuals may have to rely on personal savings, family assistance, or Medicaid for care expenses.
Life Insurance FAQs
The two primary types are term life and permanent life insurance. Term life provides coverage for a set period (e.g., 10, 20, or 30 years), while permanent life insurance (such as whole or universal life) lasts a lifetime and may accumulate cash value.
The amount depends on factors like income replacement needs, debts, future expenses (college, mortgage, etc.), and financial goals. A common rule of thumb is 10-15 times your annual income, but a thorough needs analysis is recommended.
Yes, some insurance companies offer non-smoker rates to smokers who have quit for a specified period, typically 12 months or more. Additionally, some companies allow unlimited use and positive nicotine samples for non-cigarette tobacco users—such as those who use chew, cigars, pipes, or other smokeless tobacco—to still qualify for non-smoker rates. Every carrier has different underwriting guidelines, so it’s important to explore options based on your specific situation.
Not always. Some policies require a medical exam, but many companies offer no-exam options based on health history, prescription records, and other underwriting data. No-exam policies may have higher premiums or lower coverage limits.
For term life insurance, coverage will lapse if premiums aren’t paid. With permanent policies, the policy may stay active if there is sufficient cash value to cover the premiums, but if the cash value is depleted, the policy will lapse.
Yes, if you have a permanent life insurance policy with cash value, you can borrow against it. Loans typically do not require credit checks and may have favorable interest rates, but unpaid loans reduce the death benefit.
In most cases, death benefits are paid out tax-free to beneficiaries. However, interest earned on delayed payouts and certain policy transfers could be subject to taxation.
Yes, you can own multiple policies from different insurers. Many people combine term and permanent life insurance to meet different financial goals. The total amount of coverage you qualify for depends on your income and financial obligations.
Group life insurance is offered through employers and provides limited coverage, often tied to your job. Individual life insurance is a personal policy you own, with coverage that stays in place regardless of employment.
It depends on the type of policy. Term policies usually cannot be changed, but some allow conversion to permanent coverage. Permanent policies often offer flexibility to adjust premiums, coverage amounts, and even investment options (for certain types like variable universal life).