Mr. Peterson

Which of the following is NOT a major type of health insurance? A. Workers’ Comp B. Government Health Insurance Plans C. Managed Care Plans D. Private Insurance E. None of the Above Which of the following is a factor that would affect the cost of health care? A. Previous job experience B. Gender C. Education D. Both A and B E. All of the above

To protect you and your dependents from the financial consequences of losing assets or income when an accident, illness, or death occurs.

Policyholder Face Value Amount for which the policy is written Beneficiary

Financial protection for dependents Protection from creditors Before death, cash value in life insurance policies usually protected against legal judgments and bankruptcy proceedings. After death, possible to keep benefits out of estate and away from creditors. Tax free unless withdrawn Medium for savings

Consider life insurance… If you have dependents who count on your financial support. If you have debts you would like to clear, like a home mortgage. You may not need life insurance… If no one depends on your support If you are a child

Discuss these factors on how to evaluate an insurance company. Why do you think it is important to ask these questions? Is the company respected? Is the company financially sound? How do you know? Do the benefits and options work for you? Are the insurance agents certified? Is the agent knowledgeable of the services? What are the amounts and due dates of coverage?

Term Protection for a specific period of time When time is up, so is policy (cash value) Permanent Protection as long as premium is paid

Level Premium stays the same Longer term, higher premium Decreasing Premiums remain the same while value decreases. “Mortgage loan term”

Renewable Allows insured to renew policy without evidence of insurability Pay higher premium Convertible Allows insured to convert to whole life policy without evidence of insurability Why do companies usually ask for evidence of insurability?

Economical way for young families to purchase large amounts of life insurance. Provides for needs that will disappear over time. Premiums become more costly as you get older. Premiums become more costly as you get older. Does not build cash value. Does not build cash value. Why buy term insurance?

Whole Life Provides death protection plus a savings feature called cash value. Builds If policy canceled prior to death, insured has right to cash value; this is the nonforfeiture right Can borrow against Benefits are reduced Would you use this as a retirement plan?

Provides death protection plus a savings, or cash value feature Fixed premium Cash value can be invested in a variety of mutual funds for greater possible return Can’t fall below the original amount What are the advantages/disadvantages?

Permits adjustments Premium, face value, level of protection Invested to earn interest at current market rates Annual statement Level of protection, cash value, interest earned, premium allocation Flexible

Multiple-of-Earnings Method Multiply annual earnings by an arbitrary number (usually 5-10) Needs Analysis Method Estimate needs and examine available resources

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