Got Questions? We’ve Got Answers.

Q: How are annuities taxed, and what is the difference between qualified and non-qualified?

Qualified annuities are funded with pre-tax dollars and withdrawals are taxed as ordinary income. Non-qualified annuities are funded with after-tax dollars; only growth is taxed. Proper transfers like 1035 exchanges or trustee rollovers preserve tax deferral.

Q: What is the difference between a SPIA and an annuity with a GLWB rider?

A SPIA begins paying income immediately in exchange for a lump sum. A GLWB rider is added to a deferred annuity, allowing guaranteed lifetime withdrawals while retaining some account growth potential before taking income.

Q: Are annuities FDIC insured?

No. Annuities are insurance products and are not FDIC insured. They are backed by insurer’s claims-paying ability and may have state guaranty protections up to certain limits.

Q: What fees are associated with annuities?

Some annuities have little or no annual fees, especially fixed or simple contracts. Others with riders, enhanced death benefits or guarantees include ongoing charges. Always review all cost disclosures before buying.

Q: Do annuities offer death benefits?

Yes. Most annuities include death benefits, passing remaining value to beneficiaries. Optional enhanced or guaranteed death benefit riders may increase what’s paid.

Q: How does lifetime income from an annuity work?

Lifetime income means payments continue for your lifetime. With joint-life options, payments continue for your spouse after you pass. Even if your account value goes to zero, income continues under guaranteed income designs.

Q: Why do some advisors not recommend annuities?

Some advisors use fee-based compensation and may earn more by managing assets rather than selling insurance products, which may lead them to steer clients away from annuities regardless of whether they’re suitable.

Navigating insurance and financial planning can feel overwhelming—but it doesn’t have to be. Our FAQ section is designed to answer your most common questions about life insurance, annuities, Medicare, retirement strategies, and more. Whether you’re just starting to explore your options or looking to fine-tune an existing plan, we’re here to help you make confident, informed decisions every step of the way.

Annuity FAQs

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

A true bonus is an upfront percentage added directly to your account value—it’s real money that can be withdrawn under the contract terms. A benefit base bonus, on the other hand, is only used to calculate income benefits like guaranteed lifetime withdrawals. It does not increase your actual cash value or amount available for withdrawal.
👉 Visit our annuity rate page here to compare today’s best bonus annuity offers.
How are annuities taxed, and what is the difference between qualified (Q) and non-qualified (NQ) transfers?

Qualified annuities are funded with pre-tax dollars (like from a 401(k) or IRA), so all withdrawals are taxable as income.
Non-qualified annuities are funded with after-tax dollars, meaning only the growth is taxed when withdrawn.
Transfers between annuity contracts using a 1035 exchange (non-qualified) or trustee-to-trustee transfer (qualified) are tax-deferred if done correctly.
👉 Explore annuity transfer options here.
What is the difference between a Single Premium Immediate Annuity (SPIA) and an annuity with a Guaranteed Lifetime Withdrawal Benefit (GLWB) rider?

A SPIA begins income payments immediately in exchange for a lump sum, with fixed payment amounts.
A GLWB rider is added to a deferred annuity, allowing guaranteed lifetime withdrawals while keeping access to growth and remaining account value.
👉 Learn more and get a quote for lifetime income here.
Are annuities FDIC insured?

No. Annuities are not FDIC insured because they are issued by insurance companies—not banks. However, they are backed by the claims-paying ability of the insurer and may be protected by your state guaranty association up to certain limits.
👉View your State Guarantee Fund Here
Are there any fees associated with annuities?
Do annuities provide a death benefit?
What are surrender charges?

Surrender charges are fees applied for withdrawing more than the penalty-free amount or cancelling your contract early. These usually apply during a surrender period (often 5–10 years), but many annuities allow 10% annual withdrawals without penalty.
👉 Compare annuities with low or no surrender fees here.
How are annuities commissioned, and does it come out of my money?
Does lifetime income from an annuity ever end?

No—lifetime income means exactly that. Payments continue for as long as you live, and with joint annuities, your spouse may also receive income for life. Even if your account value reaches zero, the payments continue.
👉 Get a personalized quote for lifetime income here.
Why doesnt my advisor like annuities?

Many financial advisors operate under a fee-based model, meaning they charge a percentage of the assets they manage. Since annuities are insurance products, not investment accounts, funds placed into annuities typically don’t stay under the advisor’s management—which means they may no longer earn fees on that portion of your portfolio.

As a result, some advisors discourage annuities, not because they’re bad products, but because they don’t align with their compensation structure. At Diversified Insurance Brokers, we’re independent and product-neutral. That means we’ll only recommend an annuity if it’s the right tool for your goals, and we’ll always help you compare income guarantees, tax advantages, and market protection features with other financial options.

👉 Visit our annuity rate page here to explore options that fit your retirement needs.

Burial Insurance FAQs

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What is burial insurance?

Burial insurance, also known as final expense insurance, is a small whole life insurance policy designed to cover end-of-life expenses such as funeral costs, medical bills, or outstanding debts. It offers a simple, affordable way to protect your family from unexpected financial burdens during a difficult time.
👉 Get a burial insurance quote here
How much coverage do I need for burial insurance
What is the difference between burial insurance and traditional life insurance?

Burial insurance provides smaller coverage amounts with simplified underwriting—perfect for covering final expenses. Traditional life insurance is often used for larger financial goals like income replacement or estate planning.
👉 Get a burial insurance quote here
Do I need a medical exam to qualify for burial insurance
What are the different types of burial insurance?
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

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What is long-term care insurance?

Long-term care (LTC) insurance helps cover the cost of services that assist with daily activities like bathing, dressing, eating, and mobility. It pays for care provided in the home, an assisted living facility, adult day care, or a nursing home—expenses typically not covered by Medicare or traditional health insurance.
👉 Get a long-term care insurance quote here
When should I buy long-term care insurance?

The best time to buy is typically in your 50s or early 60s, when premiums are lower and you’re more likely to qualify for coverage. Waiting until health issues develop can make coverage more expensive—or even unavailable.
👉 Get a long-term care insurance quote here
What does long-term care insurance cover

LTC insurance covers services that help with activities of daily living (ADLs) such as bathing, dressing, eating, using the toilet, transferring, and maintaining continence. It also pays for custodial care in various settings, including in-home care, assisted living, nursing homes, and adult day care.
👉 Get a long-term care insurance quote here
Does Medicare cover long-term care?
How much does long-term care cost?

LTC costs vary by location and type of care. On average, nursing home care can cost $8,000 to $12,000 per month, while in-home care or assisted living may range from $4,000 to $6,000 per month. LTC insurance helps reduce or eliminate this financial burden.
👉 Get a long-term care insurance quote here
What is the difference between traditional long-term care insurance and hybrid policies?

Traditional LTC insurance offers standalone coverage with lower premiums—but if you don’t use the benefits, there may be no payout.
Hybrid policies combine LTC coverage with life insurance or an annuity, providing a death benefit or cash value if care isn’t needed—offering more flexibility and value.
👉 Get a long-term care insurance quote here
Can I get long-term care insurance if I have pre-existing conditions?

It depends on the severity of the condition. Some insurers may approve your application with higher premiums or limited benefits, while others may decline coverage. Applying while you’re still relatively healthy gives you the best chance at affordable rates.
👉 Get a long-term care insurance quote here
What is an elimination period in long-term care insurance?

The elimination period is like a deductible—it’s the waiting period (typically 30 to 180 days) before your benefits begin. During this time, you’re responsible for paying out-of-pocket. Policies with longer elimination periods generally cost less.
👉 Get a long-term care insurance quote here
Can long-term care insurance premiums increase?
Is long-term care insurance worth it?

Yes—if you’re concerned about protecting your assets, avoiding burdening family members, and ensuring access to quality care. LTC insurance provides financial security and flexibility, giving you more choices about where and how you receive care.
👉 Get a long-term care insurance quote here
What is a Benefit Period?

A benefit period is the length of time your long-term care insurance will pay for covered services once you begin receiving care. It typically ranges from 2 years to lifetime coverage, depending on the policy you choose.

For example, if you have a 3-year benefit period and your daily benefit is $200, your policy would cover up to $219,000 in total benefits ($200 × 365 days × 3 years). Once that amount is used, the policy ends—even if you still require care.

👉 Get a long-term care insurance quote here to compare benefit periods and find the plan that fits your needs.

Medicare FAQs

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What is Medicare?

Medicare is a federal health insurance program for individuals aged 65 and older, and for some younger individuals with disabilities or End-Stage Renal Disease (ESRD). It consists of different parts covering hospital care (Part A), medical services (Part B), prescription drugs (Part D), and optional Medicare Advantage (Part C) plans.
👉 Visit our Medicare page here
What are the different types of Medicare?
Part A: Hospital insurance

Part B: Medical insurance

Part C (Medicare Advantage): Combines Parts A and B, often with additional benefits

Part D: Prescription drug coverage

Medigap (Supplement): Optional plans to help cover out-of-pocket costs in Original Medicare
👉 Visit our Medicare page here
Is Medicare free?
What is the difference between Original Medicare and Medicare Advantage?
When can I enroll in Medicare?
What happens if I don't enroll in Medicare on time?

Missing your enrollment window may result in late penalties and delayed coverage, especially for Parts B and D. It’s important to enroll on time—even if you’re still working—to avoid lifelong penalties.
👉 Schedule a call with a Certified Medicare Planner
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?

Yes. If you’re still working, you can coordinate Medicare with your employer’s health plan. Depending on the size of your employer, Medicare may act as either the primary or secondary payer. Understanding how your benefits work together is crucial to avoid coverage gaps or unnecessary expenses.
👉 Visit our Medicare page here to learn more
Does Medicare cover dental, vision, and hearing?

Life Insurance FAQs

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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.

Additional Resources to Empower Your Retirement Planning

Want to go deeper?
Explore our expert videos on YouTube for clear, unbiased guidance on retirement topics — or use our Lifetime Income Calculator to estimate how long your savings could last and identify potential income gaps.

Visit our YouTube Channel for more helpful insurance answers!

Use our calculator below to determine your guaranteed lifetime income

Frequently Asked Questions

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

A true bonus is an upfront percentage added directly to your account value—it increases your cash value under the contract. A benefit base bonus is used only for calculating income benefits (like Guaranteed Lifetime Withdrawal Benefits), and does not increase your cash value or available withdrawal amount.

How are annuities taxed, and what is the difference between qualified and non-qualified?

Qualified annuities are funded with pre-tax dollars (e.g. from a 401(k) or IRA), and withdrawals are taxed as ordinary income. Non-qualified annuities are funded with after-tax dollars; only the growth portion is taxed when withdrawn. Transfers like 1035 exchanges (non-qualified) or direct trustee rollovers (qualified) preserve tax deferral if done properly.

What is the difference between a SPIA and an annuity with a GLWB rider?

A SPIA (Single Premium Immediate Annuity) begins paying a fixed income immediately in exchange for a lump sum. An annuity with a GLWB (Guaranteed Lifetime Withdrawal Benefit) is deferred; it allows you to withdraw guaranteed income for life while retaining access to growth and account value before taking income.

Are annuities FDIC insured?

No. Annuities are insurance products and are not protected by the FDIC. Instead, they are backed by the insurer’s claims-paying ability and may have protection through your state guaranty association with certain limits.

What fees are associated with annuities?

Some annuities, especially fixed or fixed indexed, may have little or no annual fees. Others include charges for riders, enhanced death benefits, or other features. Be sure to review all cost disclosures before purchasing.

Do annuities offer death benefits?

Yes. Most annuities include a death benefit which provides your beneficiaries with remaining account value. Some contracts offer enhanced or guaranteed death-benefits as optional riders.

What are surrender charges?

Surrender charges are fees if you withdraw more than the penalty-free amount or cancel your contract during the surrender period (often 5-10 years). Many annuities allow a free withdrawal (e.g. 10%) annually in this period.

How does lifetime income from an annuity work?

Lifetime income means payments continue for as long as you live—and with joint-life options, paid to your spouse after your passing. Even if your account value goes to zero, payments still continue under a guaranteed lifetime payout design.

Why do some advisors not recommend annuities?

Some advisors use fee-based models which earn more from assets under management rather than insurance products. Annuities move money into insurance instruments, which means they may not receive future fees on those assets. That doesn’t make annuities bad—it means some advisors may be biased by their compensation structure.

Disclaimer: Product features, rates, guarantees, and carrier availability vary by state. This information is for educational purposes only—not legal, tax, or financial advice. Please consult with licensed professionals for your specific situation.