Vicki Farley, Life Insurance Agent

Answer: A no-exam life insurance policy is quicker to get approved, but also is usually more expensive. They base the decision by health questions answered rather than a recent exam and bloodwork, etc. Normally rated as standard to possibly sub-standard, pending answers.

A fully underwritten policy that requires an exam and bloodwork can take several days to several weeks for approval. Human underwriting can clarify usage of medications, (other than the typical reasons), or other health conditions that may now, no longer be a concern. Where no-exam may group conditions, regardless of individual circumstance.

Answer: That life insurance is only to assist upon the death of the insured. Basically only needed for the beneficiary to use for burial expenses.

Life insurance is a great addition to retirement planning. Benefits in many life insurance products can financially benefit the insured while living, as well as be there for the beneficiaries after death.

Answer: There is not a quick yes or no answer to this question. Each individual's personal/ financial situation plays a major role in that decision.

When setting up a trust, there is need of a trusted legal counsel.

When a policy owner is setting a trust up as a beneficiary, as required by how the trust is designed and set-up, there is a good practice often used so family gains quick access to enough funds for the funeral expense. That is in reference to the funeral not already being pre-paid, or another plan being designated for funeral expense.

A trusted family member, (along with a trusted contingent member), would be named as a Co-Beneficiary with the Trust. Giving a big enough percentage of the death benefit to go to the family member listed. That percentage would give quick access of funds to cover funeral cost.

The remaining percentage would go to the Trust, to be handled and dispersed according to how the Trust was set up, which can take an extended period of time.

Meeting with a trusted Insurance Professional, and trusted counsel is very much needed in this scenario.

Answer: Yes, a life insurance policy will pay out the death benefit even if the death occurred while traveling. There could be restrictions to this, if the travel area is an active war zone, or unnecessarily high risk activities were involved. (You may need to double check your policy before you book a swim with the Great Whites).

For additional coverage during vacation or business travel time, temporary travel insurance may also be available to purchase. This could allow for the additional costs of transporting the body back home.

Answer: This is a very personal, yet important situation.

Have an open discussion with those old enough to be a receiving beneficiary. (Funds will not be given to those under the age of 18).

Explain what is needed by the beneficiary. Have your wishes and instructions clear for all involved. (A legal Trust is highly recommended.)

Many family members will not want the responsibility.

When the beneficiary, or beneficiaries are now determined as to whom can handle and are willing to handle the responsibilities, then the next step.

Use Co-beneficiaries, dividing the death proceeds among them, equaling 100% of the benefit,

or using a single primary beneficiary. Either set-up should have contingent beneficiaries. The contingents will receive the death proceeds only if the primary has passed prior to, (or if their mental status, aka Dementia, etc, has declined to a medically documented status), prior to the death of the insured.

Remember, beneficiaries can be changed by the owner of the policy.

Answer: For most employees, group life insurance is only a certificate. When an employee leaves that employer, the coverage for the employee ends.

Certain high-level employees may have extended coverage, or life insurance as part of a retirement package, but for the general employee, once employment stops, coverage stops.

Answer: The two-year contestability. in life insurance is to protect the insurance company. During the first two years of the policy, if death is by suicide they do not pay out, that is a suicide clause, but if the death is caused by any medical reason other than suicide, the insurance company has the right to review to see if the policy owner / insured new about and omitted or fraudulently stated no to health questions that referenced the medical condition that caused the death. If found fraudulent the company will not pay the death benefit.

Answer: A graded death benefit describes the payout benefit of the plan. It can take two or three years of paying premium to be able to get full face value paid out for sickness or natural cause of death.

Ex: The policy is 1 year old, insured dies of natural causes, (Heart Attack, Stroke),the policy may pay 30% of face value, if a three-year graded period was selected. It may pay 50% if a two-year graded period was selected. Often tied in with a Simplified Issue policy, simple health questions asked.

Ex: For a Guaranteed Issue policy, no health questions asked, death of the insured by natural causes or sickness, during the first two years of the policy, benefits may be paid out by premiums paid plus 10%.

Note: Accidental Death is still paid out by 100% of the face value for both, Simplified Issue or Guaranteed Issue.

Answer: A quick answer to the difference between Joint Life and Survivorship life insurance is when they pay on the death benefit. Joint will payout when the first insured dies, where survivorship will payout after the last surviving insured dies.

Answer: A buy-sell agreement in life insurance is a legal agreement, (attorneys need involved.)

It allows the business partners, who would be the beneficiaries, to buy out the deceased partner's portion of the business, giving cash to the family. In turn, allowing the business to maintain being ran smoothly during the transition.

Answer: Yes, the Whole Life cash value, or the cash value in an IUL can be used to help pay for college education. Properly structuring the IUL for growth and the Whole Life, to avoid forming a MEC is important. Learning how to wisely pull from the cash value to reduce unnecessary taxes is another offered benefit.

Answer: With the Level Term, the premium amount is set higher, so that the premium and the death benefit remain level throughout the term years of the policy, 10 years, 20years, or 30years, for $XX/month. Making budgeting easier. With a Decreasing Term, the premium will remain at a level amount, but the face value/death benefit, will reduce throughout the term years of the policy. $500,000/through years 1-10, $300,000/through years 11-20, $100,000/through years 21-30, policy ends. Thus allowing a lower monthly premium over the term years of the policy, in comparison to a Level Term. (Note: the amounts given are for example only.)