Faq’s – Diversified Insurance Brokers

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

What is the difference between a true bonus and a benefit base bonus?

A true bonus is an upfront percentage added to the account value, meaning it is real money that can be withdrawn under the terms of the contract.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.
How are annuities taxed, and what is the difference between qualified (Q) and non-qualified (NQ) transfers?

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.
What is the difference between a Single Premium Immediate Annuity (SPIA) and an annuity with a Guaranteed Lifetime Withdrawal Benefit (GLWB) rider?

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.
Are annuities FDIC insured?
Are there any fees associated with annuities?

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.
Do annuities provide a death benefit?
What are surrender charges?
How are annuities commissioned, and does it come out of my money?
Does lifetime income from an annuity ever end?
Why doesnt my advisor like annuities?

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

What is burial insurance?

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.
How much coverage do I need for burial insurance
What is the difference between burial insurance and traditional life insurance?
Do I need a medical exam to qualify for burial insurance
What are the different types of burial insurance?

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.
Can my burial insurance premiums increase over time?
Can I purchase burial insurance for someone else?
Are burial insurance benefits taxable?
How quickly are burial insurance benefits paid out?
Can burial insurance be used for anything other than funeral expenses?

Long Term Care Insurance FAQs

What is long-term care insurance?

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.
When should I buy long-term care insurance?
What does long-term care insurance cover
Does Medicare cover long-term care?
How much does long-term care cost?
What is the difference between traditional long-term care insurance and hybrid policies?

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.
Can I get long-term care insurance if I have pre-existing conditions?
What is an elimination period in long-term care insurance?
Can long-term care insurance premiums increase?
Is long-term care insurance worth it?

Medicare FAQs

What is Medicare?

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.
What are the different types of Medicare?

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.
Is Medicare free?
What is the difference between Original Medicare and Medicare Advantage?

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.
When can I enroll in Medicare?

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.
What happens if I don't enroll in Medicare on time?
Does Medicare cover long-term care?
Do I need a Medicare Supplement (Medigap) plan?
Can I have Medicare and employer health insurance at the same time?
Does Medicare cover dental, vision, and hearing?

Life Insurance FAQs

What are the main types of life insurance?

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.
How much life insurance do I need?
Can a smoker get non-smoker rates for life insurance?

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.
Do I need a medical exam to get life insurance?
What happens if I stop paying my life insurance premiums?
Can I borrow against my life insurance policy?
Are life insurance benefits taxable?
Can I have multiple life insurance policies?
What is the difference between group life insurance and individual life insurance?
Can I change my life insurance policy after purchasing it?

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).

Use our Risk Score Calculator to determine your portfolio’s overall risk level, and the Contact Us Form to help figure out how to reduce your risk.

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

Burial Insurance FAQs

Long Term Care Insurance FAQs

Medicare FAQs

Life Insurance FAQs

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