Medicare Maze
Medicare is broken into parts. Which part covers hospital stays and inpatient care?
Part A
This rider lets a client skip premium payments if they become totally disabled.
Waiver of Premium rider
If a policyholder dies without naming a beneficiary, where do the life insurance proceeds typically go?
The estate
A 42-year-old client says, "I don't need life insurance, my kids are grown." Name one planning need they might still have.
I will accept almost any rational answer here.
This famous entertainer was known to have insured his legs for $1 million.
Michael Jackson, Fred Astaire, or Tina Turner
A client wants prescription drug coverage through Medicare. Which part do they need to add?
Part D
A client buys a 20-year term policy at age 35. This rider gives them the option to convert to permanent insurance without new medical underwriting.
Conversion rider (Convertibility rider)
A named beneficiary receives a $500,000 life insurance death benefit. How much of that is generally subject to federal income tax?
None. Death benefits paid to a named beneficiary are generally income-tax free.
A client is a teacher with a pension and thinks they don't need disability insurance. What key gap should you point out?
Most pensions require a full career to maximize benefit. If disability strikes at 45, the pension may be minimal and the client still has 20+ years of living expenses ahead. Group DI through work may also not cover pension income.
This is a myth: This fast food chain holds a "key man" life insurance policy on its founder's secret recipe, meaning the recipe itself is treated as an insurable business asset.
KFC (Colonel Sanders' Original Recipe)
A client misses their Medicare Part B enrollment window and goes 24 months without qualifying coverage. By what percentage does their Part B premium permanently increase?
20% (10% for each 12-month period they were eligible but didn't enroll)
This life insurance rider pays out an additional benefit, often equal to the face amount, if the insured dies in an accident.
Accidental Death Benefit (ADB) rider
A client names their spouse as primary beneficiary and their two adult children as contingent beneficiaries 50/50. The spouse dies before the client. Who receives the death benefit?
The two children split it 50/50. Contingent beneficiaries receive when the primary is deceased.
A 58-year-old client says LTC is too expensive and they'll just "self-insure." They have $400K saved. What's the most compelling counter-point?
The average nursing home stay costs $90K-$100K+ per year. A 3-5 year stay could wipe out their entire savings, leaving a spouse with nothing. LTC risk is about protecting assets, not just covering care costs.
This soccer superstar insured his legs for $144 million, the largest body part insurance policy ever reported.
Cristiano Ronaldo
What is the key difference between Medicare Supplement (Medigap) and Medicare Advantage (Part C)?
Medigap works alongside Original Medicare to cover gaps like copays and deductibles. Medicare Advantage replaces Original Medicare entirely and is run by private insurers, usually with network restrictions.
A client with a disability insurance policy wants protection if inflation makes their benefit feel small 20 years from now. What rider addresses this?
Cost of Living Adjustment (COLA) rider
client names their minor child as sole beneficiary. The client dies. What problem arises?
100 Point Bonus: What is a great tool to avoid this problem?
Minors cannot legally receive life insurance proceeds directly. A court-appointed guardian or custodian must manage the funds until the child reaches adulthood.
Bonus: Trust
A client turns 65 and is still working with employer coverage. They ask if they need to sign up for Medicare. What's the key question you need answered first?
How many employees does their employer have? If fewer than 20, Medicare becomes primary and they need to enroll in Part B to avoid gaps. If 20+, they can typically delay Part B without penalty.
The first life insurance policy in the United States was issued in this decade, making life insurance older than the country itself.
Will Accept 1750-1770
A client on Medicare has a hospital stay that runs longer than 60 days. What financial exposure do they face under Original Medicare with no supplement?
They become responsible for a daily coinsurance amount (roughly $400+ per day for days 61-90), and benefits are exhausted entirely after 90 days plus 60 lifetime reserve days.
This rider on a permanent life insurance policy allows the insured to access a portion of the death benefit while still alive if diagnosed with a qualifying terminal, chronic, or critical illness.
Accelerated Death Benefit / Living Benefits / Terminal Illness Rider
A client owns a life insurance policy on their business partner under a buy-sell agreement. The partner dies. Who receives the death benefit, and what is it typically used for
The surviving owner (or the business entity) receives it and uses it to buy out the deceased partner's ownership interest from their estate.
A client has a $500K whole life policy with $120K in cash value. They're thinking about surrendering it for the cash. Name two significant financial consequences they should understand before doing so
1) The gain above cost basis (premiums paid) is taxable as ordinary income. 2) They lose the death benefit permanently and may be uninsurable in the future. 3) Surrender charges may apply depending on policy age.
This country has the largest life insurance market in the world by premium volume, surpassing the United States as of recent years.
China