Mark Boone, Life Insurance Broker

Answer: Final expense insurance is usually a smaller-scale permanent life insurance policy designed to cover end-of-life costs like funeral services, burial or cremation, and unpaid medical bills. It typically features smaller payouts, usually in the $5000-$50000 range and has an easier application process. Final Expense policies usually have no medical underwriting or a simplified underwriting. Usually they ask a few medical questions and there is no medical exam. Regular life insurance usually has a medical exam and detailed underwriting questions.

Answer: The most common mistake people make is buying too little coverage. Many severely underestimate the amount needed to maintain their family's standard of living, resulting in a death benefit that is only enough to cover basic funeral costs rather than replacing lost income, covering a mortgage, or funding long-term needs

Answer: Life insurance generally covers both accidental death and suicide, though each comes with specific conditions and waiting periods.

Accidental death is typically covered immediately, whereas suicide is subject to an initial exclusion period, usually 2 years, to prevent policies from being purchased with the immediate intent to self-harm.

Accidental deaths (such as car crashes, falls, or drowning) are covered immediately from the date the policy goes into effect.

An insurer may deny the claim if the accident occurred during the commission of an illegal act, from an intentional self-inflicted injury, or while participating in extremely high-risk or prohibited activities.

Answer: Life insurance agents are paid from the insurance company and not directly from the client. In most cases it does not cost you more to use an agent instead of buying direct. All premiums must be approved by the state insurance commissioners so you would be paying the same if you use an agent. An agent can actually save you money because most will do a fact finder and find out what type of insurance is right for you as well as how much coverage to purchase. They can also be your ally if you have some health issues and be able to work with the underwriter to get you the best premium.

Answer: Life insurance death benefits are generally income tax-free for beneficiaries.

However, taxes may apply in specific scenarios:

Payout Structure: If you receive the payout in installments or as an annuity, the interest that accrues is taxable.

Employer-Provided Policies: Group-term life insurance paid by an employer is tax-free up to $50,000; coverage exceeding that amount may be treated as taxable imputed income.

Estate Taxes: If the deceased owned the policy, the proceeds are included in their estate and could be subject to federal or state estate taxes if the total estate value is extremely high.

Answer: The biggest difference is that a financial advisor usually has a securities license and can help with mutual funds, stocks and variable annuities where a life insurance agent usually does not have that license and can help you with life insurance and fixed or indexed annuities.

Answer: Once a certified death certificate and a claim form are received at the insurance company and everything is in order, the death benefit could be paid out as fast as 3-5 business days or as long as 60 days. Standard is approximately 2 weeks.

Answer: Return of premium life insurance refunds all your base payments if you outlive a specified term. While it eliminates the "sunk cost" of traditional term insurance, it is generally not a good financial deal because premiums cost 2 to 3 times more than standard coverage, and the refunded money earns zero interest.

The pros of an ROP policy are that it acts as a forced savings account for risk-averse individuals; guarantees you get money back if you outlive the policy.

The cons are significantly higher monthly or annual costs; zero inflation adjustment or interest accumulation on returned cash; complete loss of the savings benefit if you drop the policy before the final year.

Answer: yes you can. It depends on the condition, when it was diagnosed and how its being treated. Some pre-existing conditions do not make a difference while others would cause the policy to be rated, thus increasing the premium while others could be a decline. There are some guaranteed issue policies that can cover someone with severe issues. Those policies usually have graded death benefits, which means for the first two years all your beneficiary would receive is the premiums paid plus a percentage. After two years, those policies usually pay the full death benefit.

Answer: That's really a tough question to answer from how much you should spend on premiums monthly. Spending is based on age, health, needs,etc will determine how much coverage you may need. If you are younger with a family, your needs may be greater, as we get older, our needs shift and we may not need as much coverage and then our ideas shift to not being a burden to our family from a final expense point of view or if we want to leave a legacy for our family or charity. The general rule of thumb when you are younger is a minimum of 8-10 times your annual income.

Answer: There are many different factors that go into determining your monthly premium costs. Age, gender, health history and tobacco use.

The younger you are, usually the less expensive the premium as we as if you are male or female, woman usually live longer so they usually have lower rates, your tobacco use plays a role in determining your rate, as well as your health history. All of these factors play a role in determining your monthly cost along with the amount of coverage you are purchasing.

Answer: The two-year contestability period in life insurance is usually the first two years after a policy goes into effect when the insurance company has the legal right to investigate the application for errors, omissions, or misrepresentations.

Once the two-year mark passes, the policy becomes incontestable. The insurer must pay the death benefit and can no longer challenge the claim based on application mistakes, unless outright fraud is proven