Life Insurance

Objectives Describe the purpose and the uses of life insurance Compare and contrast the different types of life insurance Develop knowledge-based recommendations to meet the life insurance needs of hypothetical customers

Underwriting for Fictional Characters What would happen to a young family of five if the father passed away without a life insurance policy? The father earned the majority of the income, essential to the family’s financial well-being. The children’s mother works part-time to help supplement the family’s income but does not make enough to cover bills. The three small children were very young and were in daycare while the mother worked at her part-time job. The young family had not planned for the tragic and unexpected loss of their father and their primary income.

Underwriting for Fictional Characters Think of the worst-case scenarios, including homelessness, to illustrate the urgency in protecting family assets and well-being through the benefit of a life insurance policy, should tragedy strike It will not bring the father back, but it will help the family survive without him

Underwriting for Fictional Characters Life insurance provides a set amount of financial protection for the beneficiaries of the policy after the death of the insured. The role of the underwriter is to determine insurability and set premiums.

Underwriting for Fictional Characters Quickly identify 5 to 10 diverse movie or TV characters that everyone knows Rate each character as low, medium, or high risk for premature death. Different underwriters have different opinions and tolerance for risk and use the company guidelines as closely as they can.

Underwriting for Fictional Characters You should have an understanding of the factors (such as dangerous occupation, smoking, poor health, etc.) that an underwriter might consider when reviewing an insurance application

Reasons People Buy Life Insurance People purchase life insurance for different reasons and that insurance companies have developed many different types of policies to meet those needs Download: Worksheet- Why People Buy Life Insurance Read and write in possible answers

Reasons People Buy Life Insurance Download: Reading- Why People Buy Life Insurance Read and review questions Download: Worksheet- Why People Buy Life Insurance

Why People Buy Life Insurance Work on one of the homework questions; come up with what they think is the complete and best answer to their question People buy life insurance for a variety of needs, including: To provide financial protection for their families To pay for funeral expenses To provide potential income during their retirement years As a means to transfer wealth to their heirs

VIP Life Insurance Evaluate a number of possible insurance policies and choose one for their selected VIP Download: Memo- VIP Life Insurance Assignment Download: Instructions- VIP Life Insurance Recommendations

Life Insurance Overview Presentation

VIP Life Insurance Download: Reading- Life Insurance Overview Use it to answer questions on the following worksheet Download: Worksheet- Choosing a Life Insurance Policy Choose one of the life insurance policies (or no policy!) and explain why they are recommending it You must identify one policy that you specifically recommend against

VIP Life Insurance Memo What are the characteristics of a well written memo? A heading with the date, author, intended recipients, and subject. Concise, often with instructions. No formal salutation or closing. Draft a memo to their client that contains their recommendation

VIP Insurance Memo The memo must also contain an option for a policy with either less coverage or more coverage

VIP Insurance Memo Peer Review In what ways does the recommendation meet the needs of the VIP client? In what ways does the recommendation fail to meet the needs of the client? In what ways does the author meet the standard memo format? In what ways can the author make her memo conform better to the standard memo format?

VIP Insurance Memo Final Draft Draft Final Memos based on peer review

Life Insurance If you could only afford either health insurance or life insurance but not both, which would you buy, and why?

Enrichment Research and write a report on viatical settlements, where life insurance policyholders sell a policy to an investor before it matures. Take a stand on their perception of the ethicality of this type of transaction.

Cross-Curricular Integration Math: Life tables (or mortality tables) are important tools of actuarial scientists working in life insurance. Research and create a chart of mortality rates at different points in the 20th and 21st century (perhaps every 25 years) and for different ages, including for infants, for an 18-year-old, and then for overall life expectancy.

Cross-Curricular Integration Financial Planning: Life insurance can be used as a vehicle for tax savings and tax deferral, and as a means of passing on assets to heirs Research when and how individuals might take advantage of these benefits and report back to the class.