Questions and Answers on Life Insurance

by Anthony Steuer

Overview

Questions and answers on life insurance if the definitice resource on life insurance. Tony Steur's invaluable advice will safeguard readers from unpleasant surprises and unnecessary pitfalls when facing the constant barrage of information from competeing life insurance companies. Steur delivers a practicaly, one-of-a-kind resource for choosing the best insurance policy for an individual or family.

Product Details

ISBN-13:	9780984508112
Publisher:	Emerald Book Company
Publication date:	08/01/2010
Sold by:	Barnes & Noble
Format:	eBook
File size:	2 MB

Table of Contents

Introduction 1

Chapter 1 Introduction to Life Insurance

Q1 What Is Life Insurance, Where Did It Come From, and Why Should I Care? 3

Q2 Why Do I Need Life Insurance? 5

Q3 How Much Life Insurance Do I Need? 7

Chapter 2 Types of Life Insurance

Q4 What Are the Basic Types of Life Insurance Products Out There? 32

Q5 How Do I Tell the Basic Differences Between Term and Permanent Life Insurance? 33

Q6 The $64,000 Question-Should I Buy Term Life Insurance or Permanent Life Insurance and Invest the Difference? 34

Q7 What Are the Different Types of Term Life Insurance? 36

Q8 How Do I Recognize the Advantages and Disadvantages of Term Life Insurance? 37

Q9 What Are Some of the Characteristics of Permanent (Cash Value) Life Insurance? 38

Q10 What Are the Types of Permanent (Cash Value) Life Insurance? 39

Q11 What Are Endowment Life insurance Policies? 39

Q12 How Can I Tell the Difference between the Many Types of Whole Life Insurance? 40

Q13 What Is Universal Life Insurance? 44

Q14 What Are Variable Life and Variable Universal Life and Why Are They Different? 48

Q15 What Are No-Load/Low-Load Life Insurance Products? 50

Q16 What Are Some Advantages and Disadvantages of Permanent (Cash Value) Life Insurance? 52

Q17 What Is a Policy Rider? 53

Q18 Are There Any Other Types of Life Insurance? 54

Q19 How Do I Make a Cost Comparison between Life Insurance Policies? 56

Chapter 3 Choosing and Evaluating a Life Insurance Policy

Q20 How Do I Choose a Term Life Insurance Policy? 57

Q21 What Are Life Insurance Illustrations and How Can They Help? 59

Q22 How Do I Read a Typical Term Life Insurance Illustration? 59

Q23 What Should I Look for in a Term Life Insurance Illustration? 62

Q24 What Should I Consider in Choosing and Evaluating a Permanent (Cash Value) Life Insurance Illustration and Prospective Policy? 65

Q25 What Are the Four Basic Components That Compose and Dictate the Performance of a Life Insurance Policy? 66

Q26 What Is Really Important in an Illustration/ Product Analysis? 66

Q27 What Type of Earnings Are There on a Life Insurance Policy? 68

Q28 What Are Dividends? 68

Q29 What Are Interest Rates and How Are Interest Earnings Credited? 71

Q30 What Is the Difference Between Gross and Net Interest Rates? 72

Q31 On What Are the Interest Rate Assumptions in an Illustration Typically Based? 72

Q32 What Other Questions Should I Consider Regarding Interest Rates and Dividends? 73

Q33 How Is a Mortality Charge Determined? 74

Q34 What Are Overhead and Administrative Expense Charges? 75

Q35 What Are Persistency and Lapses? 77

Q36 What Is Lapse Support? 77

Q37 Why Should I Watch out for Lapse-Supported Products? 78

Q38 How Do These Factors Affect the Performance of a Permanent Life Insurance Policy? 79

Q39 What Are Some Other Considerations and Situations? 80

Q40 What Is a Universal Life Insurance Policy Illustration? 81

Q41 Is There Any Way to Guarantee the Death Benefit on My Cash Value Life Insurance Policy? 81

Q42 Is There Any Oversight of Policy Illustrations? 83

Chatter 4 How to Choose a Life Insurance Company

Q43 Where Do I Start in Choosing a Life Insurance Company? 86

Q44 What Is a Rating? 87

Q45 Who Are the Rating Agencies? 88

Q46 How Do I Find Out More about Each Rating Service? 90

Q47 How Do I Compare the Ratings from Each of the Five Major Rating Services on a Relative Basis? 93

Q48 What Are the Definitions for Each Rating? 94

Q49 What Would Be of Assistance in a Financial Analysis? 101

Q50 Who is IRIS (Insurance Regulatory Information Reports)? 105

Q51 What Is the Risk Based Capital System? 106

Q52 Are the Carriers Held to any Ethical Standard? 108

Q53 How Do I Find Out About Any Complaints Filed Against My Insurance Company or File My Own Complaint? 110

Q54 So, What is the Best Way to Select An Insurance Company? 111

Chapter 5 Finding a Life Insurance Agent

Q55 How Do I Find a Life Insurance Advisor? 112

Q56 What Are the Regulatory Resources for Researching a Life Insurance Advisor? 113

Q57 What Else Do I Need to Know About My Insurance Advisor? 114

Q58 How Is the Agent Compensated and How Will That Affect the Advice You're Given? 116

Q59 How Is the Current Compensation System Harmful to Agents and Consumers? 117

Q60 Can an Advisor Accept Both a Fee and a Commission? 119

Q61 Is There a Code of Ethics for Life Insurance Agents? 121

Q62 What Is the History, Purpose, and Structure of State Insurance Regulation? 135

Q63 Why Do States Currently Regulate Insurance? 139

Chapter 6 Other Issues before Buying A Policy

Q64 Okay, I'm ready to Buy Some Life Insurance. What Should I Expect? 144

Q65 How Will I Know That This Is the Right Policy for Me; In Other Words, Is it Suitable? 145

Q66 Is There a Difference in How Often I Pay My Premium? 149

Q67 What Is Insurable Interest? 151

Q68 What Should I Consider in Choosing a Beneficiary? 155

Q69 Who Should I Name as the Policy Owner? 157

Q70 What Are Life Insurance Survivor Options? 157

Chapter 7 Understanding Underwriting

Q71 What Is Underwriting and Why is it Important to Me? 159

Q72 How Do I Begin to Understand the Underwriting Process? 159

Q73 How Does the Underwriting Process Work? 160

Q74 What Are Some Tips for My Life Insurance Examination? 161

Q75 Who Is the Medical Information Bureau (MIB)? 162

Q76 What Is a Rated Premium (and/or Do I Have a Known or Unknown Medical Condition)? 164

Q77 How Will My Build Affect My Insurance Premium? 167

Q78 What Are Some Sample Guidelines to Qualify for Preferred Rates? 168

Q79 How Will Tobacco Usage Affect My Premiums? 168

Q80 How Do I Find Out Why My Life Insurance Application Was Not Approved or Modified? 170

Q81 What Is Financial Underwriting? 171

Q82 How Does the Conditional Receipt Work? 172

Q83 Why is Honesty the Best Policy and/or Can What the Insurance Company Doesn't Know Hurt You? 173

Q84 Is There Anything Else That I Need to Know About Underwriting? 174

Chapter 8 Monitoring Your In-Force Life Insurance Policy

Q85 How Do I Monitor and Evaluate an In-force Policy? 175

Q86 What Areas Should I Review for Potential Changes? 175

Q87 Is My Current Permanent Life Insurance Policy in Good Health? 177

Q88 What Is an In-force Illustration? 182

Q89 How Do I Order an In-force Illustration? 182

Q90 What Will the In-force Illustration Tell Me? 182

Q91 Are There Other Issues If I Purchased a Limited Premium-Payment Policy? 195

Q92 How Do I Measure a Life Insurance Policy's Internal Performance and Compare It with Another Policy? 197

Chapter 9 What Should I Know About Life Insurance Replacements?

Q93 Why Would I Consider a Life Insurance Replacement? 215

Q94 How Is Replacement Defined? 216

Q95 What Issues Favor Replacement? 217

Q96 What Issues Favor Retention of an Old Policy? 217

Q97 What Are Some Questions to Consider Before Replacing? 219

Q98 What Type of Worksheet Can I Use With a Proposed Term Life Insurance Replacement? 220

Q99 What Type of Worksheet Can I Use With a Proposed Permanent Life Insurance Replacement? 222

Q100 Are There Any Special Situations to Consider? 224

Q101 Are There Any Tax Issues to Consider with a Replacement, and What Is Internal Revenue Code Section 1035? 227

Q102 What Are Some Myths about Replacement? 228

Q103 What Are Some Reasons for Replacing? 229

Q104 What are Some Areas to Use Caution in Making a Replacement? 230

Q105 How Have the Replacement Regulations Evolved to Provide More Protections For Consumer? 230

Chapter 10 What You Need to Know About Policy Loans

Q106 What Is a Policy Loan, and Why Might I Not Want One? 233

Q107 Are Policy Loans Tax-Free? 234

Q108 How Does a Policy Loan Become Harmful? 236

Q109 How Can a Policy Loan Be a Pitfall? 237

Chapter 11 Life Insurance and Qualified Retirement Plans

Q110 Should I Have a Life Insurance Policy Inside of a Qualified Retirement Plan? 240

Q111 Why Can It Be a Good Idea to Have Life Insurance Inside of a Qualified Retirement Program? 241

Q112 Why Is Having Life Insurance Inside a Qualified Retirement Program Not a Good Idea? 242

Q113 What Else Do I Need to Know About Life Insurance Inside a Qualified Plan? 243

Q114 Are There Any Government Regulation Issues and Concerns (Insurance Industry As Well) Regarding Life Insurance in a Qualified Plan? 244

Chapter 12 Taxes and Life Insurance

Q115 Does the Cash Value of My Permanent Life Insurance Policy Grow on a Tax-Deferred Basis? 247

Q116 How Are Withdrawals from a Permanent Life Insurance Policy Typically Taxed? 248

Q117 Are Policy Loans Income Tax Free? 248

Q118 What Are the Income-Tax Consequences of the Inside Interest During the Policy's Lifetime and at Surrender/Termination? 248

Q119 Are There Any Taxes on a Life Insurance Death Benefit? 249

Q120 How Could the Estate Tax Affect My Estate? 251

Q121 How Is a Monetary Settlement Received from an Insurance Company Class Action Settlement Taxed? 251

Chapter 13 Life Insurance Trusts

Q122 What Is an Irrevocable Life Insurance Trust, and Why Should I Consider It? 254

Q123 How Does an Irrevocable Life Insurance Trust Work? 256

Q124 What Is My Basic Role If I'm Named Trustee? 256

Q125 What Are Some Tools to Assist Me as a Trustee and Fiduciary? 257

Chapter 14 Miscellaneous Issues

Q126 What Happens When It Is Time for a Claim to Be Paid? 258

Q127 What Happens When You Need to Track down a Missing and/or Unknown Life Insurance Policy? 260

Q128 What If a Life Insurance Company Goes Bankrupt? 263

Q129 As a Business Owner, Are There Any Special Planning Concepts? 266

Q130 Can I Donate My Life Insurance Policy to a Non-Profit/Charitable Organization? 277

Q131 What Are Some Tips on Understanding Viatical and Life Settlements to Sell a Life Insurance Policy? 280

Q132 What Is Stranger-Owned Life Insurance (STOLI)? 289

Q133 What Is Premium Financing and How Does It Work? 296

Q134 What Is Private Placement Life Insurance? 301

Conclusion: What Should I Make of All of This? 304

Appendix A Contact Information for All State Insurance Departments 306

Appendix B Additional Factors That May Impact Underwriting and What You Need to Know 316

Glossary: Key Life Insurance Terms 325

Index 363

Services Offered 377

Professional Biography 381