Marc Carr, Life Insurance Broker

Answer: Final expense insurance is permanent insurance for people ages 50 to 85 designed to cover burial costs and other associated costs at time of death. It is also grows with cash value. Death benefits range from $2,000 to $35,000.

Regular insurance is available to all ages, with benefits ranging from $20,000 to millions, but does not grow with cash value. It's usually called Term insurance and you pick a time frame of coverage like 10, 15, 20 or 30 years of coverage.

Answer: Buying more than they need. Also, buying insurance needs to fit your monthly budget so that the policy does not lapse. Another mistake is not knowing the difference between Term life insurance and Permanent life insurance.

Answer: Yes and No.

In most cases the money is protected by the fact that a beneficiary is named to receive the money upon death, and also money can be given to the estate.

However there are some circumstances where creditors may take life insurance money. For example if you are on Medicaid, Medicaid would be able to take the life insurance proceeds from you should you end up in a nursing home and have no way to pay for it. Upon death Medicaid would be entitled to the money in the life insurance to cover the costs of being in the nursing home.

Answer: The difference between an independent agent and a captive agent is that an independent agent can look at many different carriers and provide quotes to the different carriers.

Whereas a captive agent can only give you quotes for the one carrier that they represent.

Answer: Accidental death and dismemberment is usually a benefit added to a life insurance policy, typically called a rider. Should one pass away from an accident or be dismembered, lose a leg, an eye or an arm, the payout can be increased substantially sometimes doubled.

For example if you had a $25,000 life insurance policy and you died because of an accident from a public transit Airline or bus company you would receive $50,000.

Answer: The amount that a typical family needs for life insurance is enough to cover mortgage on a home, and other debts. As well a family should think about the children's future for college expenses, along with a spouse who is working and the amount of income that would need to be replaced.

Answer: No, usually not. Here is why. When you pay monthly premiums it is money taken out of your personal checking or savings account. This money in your checking/savings has already been taxed. Therefore you can not deduct the monthly payments against your taxes.

However, if you own a business, and you take out a life insurance policy on a Key Employee, and use your business checking to pay monthly premiums on the life insurance policy, then this would be ok to deduct the monthly premiums as a tax deduction as this would be considered a business expense.

Answer: To have a life insurance policy cover you for these risky situations means the Life insurance company is taking on a high risk and will charge a much higher premium to cover you. The insurance company might even put a clause in the policy stating that should your death be a direct result of the dangerous job or risky hobby that you participate in like sky diving or motor car racing, they will not pay out the death benefit to the beneficiary.

Alternatives then to consider would be to see if the employer could offer group insurance for such a risky job, or an organization or club that you are a member of could offer the group insurance for the said hobby you take part in.

Answer: There are several ways. You can contact the agent who helped you or your loved one purchase the policy. Or call the insurance company directly to inform them of the death. They will require a death certificate.

Answer: Look at the agent or broker's reviews. See if their business has a Better Business Bureau accreditation. This can help someone decide who to work with.

Answer: Yes, you can buy life insurance for your children. It is worth it because it is very inexpensive since they are so young and generally very healthy. Plus permanent insurance also called whole life insurance can build cash value, and even become paid up insurance.

Answer: It is necessary then to have a "contingent" beneficiary. Typically this is done at time of application, but if not then one would need to be declared and thus an amendment would be made to the policy reflecting a contingent beneficiary.

Answer: Underwriting is the process by which an insurance company reviews your answers to the health questions and decides whether or not they want to take you on as a client. It is similar to a job interview. The company has to decide how much of a risk you are to them. Ultimately they prefer healthy people who can pay monthly premiums for a long time, but you never know when death will occur!

Answer: You borrow money to pay the monthly premium. Sometimes life happens and we can get behind on the payments and we need to borrow money out of the policy. If there is some cash value in the policy we can borrow it to pay the monthly premium that is due. Afterwards the insurance company will inform you that the death benefit was reduced due to you having borrowed against the policy. You can pay it back when you are able to or just let it be a reduced death benefit.

Answer: The answer is YES. Most policies state that after policy has been issued and cause of death is by suicide, policy will pay full death benefit but ONLY if the policy is 2 years old. If suicide occurs within the first 2 years of policy then there will be NO death benefit paid to the beneficiary.

Regarding accidental death there is no waiting period like the suicide clause. And some policies offer an Accidental rider and if taken the face amount will double if death is caused by an accident.

Answer: If it can be proven that a person lies on the application then the death benefit payment to beneficiary will be denied. As well, the agent can also be investigated and potentially terminated from the carrier.

Answer: Yes, but this will most likely require questions and answers to one's health to make sure an applicant can still qualify for the new coverage.

Answer: Yes, term life can be converted to permanent coverage. However, there will most likely be a substantial increase on the monthly premium. But for some this might be a good thing if one's health has worsened to the point of being uninsurable.

Answer: A waiver of premium rider is to prevent a missed monthly payment. If the waiver of premium is used, then cash value or the death benefit is decreased until you have paid for the missed premium.

Answer: Life insurance is a great way for people to create wealth and protect it within the estate and the family trust. Large policies with large amounts of cash value allow the insured to take money out of the policy as if it was their own personal bank. Or allow the cash value to be untouched and be passed on as legacy money to their family.

Answer: Bring any current life insurance policies held to discuss, review and compare to a new policy being purchased. Also bring checking or savings account information and an official ID like driver's license.