Helping Others Daily FAQ's
Frequently asked questions answered with Clarity and Confidence
Table of Contents
Life Insurance
Life insurance is a financial contract between an individual and an insurance company. In the event of the insured person’s death, the insurance company provides a lump-sum payment to the beneficiaries.
Life insurance helps provide financial protection for your loved ones in case of your untimely death. It can cover funeral expenses, replace lost income, and pay off debts.
You pay regular premiums to the insurance company, and in return, they provide a death benefit to your beneficiaries if you pass away during the policy term.
Common types include term life insurance, whole life insurance, and universal life insurance. Each type has its own features and benefits.
The amount of coverage depends on factors like your income, debts, and the financial needs of your dependents. A common rule of thumb is to have coverage that is 5-10 times your annual income.
Term life insurance provides coverage for a specified term, usually 10, 20, or 30 years. It pays a death benefit only if you die during the term.
Whole life insurance provides coverage for your entire life. It also includes a cash value component that grows over time and can be accessed by the policyholder.
Generally, the death benefit from a life insurance policy is not taxable. However, there are exceptions, such as when the policy has a cash value component.
Yes, you can typically change your beneficiary at any time by contacting your insurance company and completing the necessary paperwork.
Premiums are the payments you make to the insurance company. They can be paid monthly, annually, or in other frequencies, depending on the policy.
Yes, it’s possible to have multiple life insurance policies to increase coverage or meet different financial needs.
If you outlive your term policy, the coverage ends, and there is no payout. Some policies may offer the option to renew or convert to a permanent policy.
Whole life and universal life policies often allow policyholders to borrow against the cash value. However, it’s important to repay the loan to avoid reducing the death benefit.
A beneficiary is the person or entity designated to receive the death benefit from a life insurance policy.
Underwriting involves assessing the risk of insuring an individual. Factors like age, health, and lifestyle are considered during the underwriting process.
It depends on the severity of the condition. Some insurers may offer coverage with higher premiums or certain restrictions for pre-existing health conditions.
The contestability period is a specific timeframe (usually two years) during which the insurance company can investigate and deny a claim if the insured’s death is found to be a result of fraud or misinformation.
While life insurance is often associated with providing for dependents, some individuals use it for other purposes, such as covering funeral expenses or leaving a legacy.
Depending on the type of policy, you may be able to surrender it for its cash value. However, this may have tax implications, and the cash value is usually less than the death benefit.
It’s advisable to review your life insurance coverage whenever significant life events occur, such as marriage, the birth of a child, or major financial changes. Regular reviews ensure that your coverage aligns with your current needs.
Fixed Annuities
A fixed annuity is a financial product that provides a guaranteed, fixed rate of return over a specified period, typically through an insurance company.
Unlike variable annuities, fixed annuities offer a stable and guaranteed interest rate, providing a predictable income stream.
Fixed annuities can have different terms, such as 3, 5, 7, or 10 years. The chosen term determines the duration of the guaranteed interest rate.
Fixed annuities generally have lower fees compared to variable annuities. It’s important to review the terms of the annuity for any applicable charges.
Some annuities allow for 1035 exchanges, enabling you to transfer funds from one annuity to another without triggering immediate taxes.
No, one of the key features of fixed annuities is that the principal is guaranteed, and you won’t lose money due to market fluctuations.
Interest in a fixed annuity is credited at a predetermined rate specified in the contract. It remains fixed for the duration of the chosen term.
At the end of the term, you may have the option to renew the annuity, convert it to another type, or withdraw the funds.
Fixed annuities often have surrender periods during which early withdrawals may incur charges. After the surrender period, you can typically access your money without penalties.
Yes, fixed annuities can provide a reliable source of retirement income with their guaranteed interest rates and options for periodic payouts.
Immediate fixed annuities start payouts shortly after the contract is funded, while deferred fixed annuities delay payouts to a future date.
Some fixed annuities offer optional riders, such as a death benefit rider or a cost-of-living adjustment rider, to customize the policy to your needs.
Yes, the interest earned on a fixed annuity is generally taxable. However, taxes are deferred until you make withdrawals.
Depending on the terms of your contract, you may have the option to convert a fixed annuity into a different type, such as a variable annuity.
Yes, fixed annuities provide protection from market volatility as the interest rate is fixed and not tied to the performance of the financial markets.
Typically, fixed annuities have a one-time premium payment. Additional contributions may not be allowed, but it depends on the specific terms of your annuity contract.
While both offer fixed interest rates, fixed annuities may provide higher returns and tax advantages compared to CDs.
Yes, you can designate beneficiaries to receive the death benefit in the event of your passing.
Yes, fixed annuities are often considered suitable for conservative investors seeking stability and guaranteed returns without exposure to market risks.
Fixed annuities may be impacted by inflation over time as their fixed interest rates may not keep pace with rising costs. Some annuities offer inflation protection options.
Medicare
Medicare is a federal health insurance program in the United States for individuals aged 65 and older, certain younger people with disabilities, and those with specific medical conditions.
Eligibility is primarily based on age (65 and older) or certain disabilities. Some individuals under 65 with specific medical conditions may also qualify.
Medicare consists of four parts: Part A (Hospital Insurance), Part B (Medical Insurance), Part C (Medicare Advantage), and Part D (Prescription Drug Coverage).
Many people enroll in both Part A and Part B to have comprehensive coverage. Part A covers hospital stays, while Part B covers medical services and preventive care.
Medicare Advantage plans, offered by private insurance companies, provide coverage for hospital and medical services. They often include additional benefits like dental and vision.
Costs vary for each part of Medicare. Part A is often premium-free for eligible individuals, while Part B and other parts may have monthly premiums, deductibles, and copayments.
Yes, during specific enrollment periods, you can change your Medicare coverage. The Annual Enrollment Period (AEP) allows for changes to Medicare Advantage and Part D plans.
Medicare Part D provides prescription drug coverage. You can enroll in a standalone Part D plan or choose a Medicare Advantage plan that includes prescription drug coverage.
Medigap policies are private insurance plans that help cover the gaps in costs left by Original Medicare (Part A and Part B), such as copayments, deductibles, and coinsurance.
Wills
A will, also known as a last will and testament, is a legal document that outlines your wishes regarding the distribution of your assets, the care of your minor children, and other matters after your death.
A will is crucial for ensuring that your assets are distributed according to your wishes, and it allows you to designate guardians for your minor children, among other important decisions.
Anyone who has assets and wishes to specify how those assets should be distributed after their death should consider having a will. This includes individuals with both large and small estates.
If you die without a will, state laws will determine how your assets are distributed, which may not align with your preferences. The court will also appoint a guardian for your minor children.
You can create a will through various methods, including hiring an attorney, using online will-making tools, or using pre-made templates. It’s advisable to consult with a legal professional to ensure your will is legally sound.
A will should include details about the distribution of assets, appointment of an executor, designation of guardians for minor children, and any specific wishes you have regarding your funeral or burial.
Yes, you can update your will at any time. Changes are typically made through a codicil (an amendment to the will) or by creating a new will that explicitly revokes the previous one.
Many people have digital assets, such as online accounts and cryptocurrencies. It’s important to specify how you want these assets to be handled in your will or through other estate planning tools.
While a will is a crucial part of estate planning, other documents, such as a living will, healthcare proxy, and power of attorney, may also be necessary to address different aspects of your estate and personal care.
While it’s not mandatory to have a lawyer, consulting with one is often advisable to ensure your will complies with state laws and is clear and legally binding. Online tools can be helpful, but professional guidance may be beneficial, especially for complex situations.
