1. Y O U R I N S U R A N C E N E E D S1P E R S O N A L F I N A N C I A L M A N A G E M E N T P R O G R A M Your Insurance Needs 1

2. Y O U R I N S U R A N C E N E E D S2 Purpose of Insurance To provide protection from financial loss. Your Choices: Avoid Risk Reduce Risk Retain Risk Transfer Risk To provide protection from financial loss. Your Choices: Avoid Risk Reduce Risk Retain Risk Transfer Risk 2

3. Y O U R I N S U R A N C E N E E D S3 The Life-Cycle Approach to Insurance Needs Major Life Events Determine Needs – Housing Situations – Family Situations – Accumulation of Assets – Retirement – Death Are you covered? Major Life Events Determine Needs – Housing Situations – Family Situations – Accumulation of Assets – Retirement – Death Are you covered? 3

4. Y O U R I N S U R A N C E N E E D S4 Single in Quarters Renters Policy: – Whats covered in Government Quarters? Life Insurance: – Is anyone else depending on your income? – Final Expenses only - SGLI is enough Renters Policy: – Whats covered in Government Quarters? Life Insurance: – Is anyone else depending on your income? – Final Expenses only - SGLI is enough 4

5. Y O U R I N S U R A N C E N E E D S5 Moving Off-Base Renters Policy Make sure your property is covered at all times, at replacement cost levels! Renters Policy Make sure your property is covered at all times, at replacement cost levels! 5

6. Y O U R I N S U R A N C E N E E D S6 Buying a Car Auto Insurance – Liability - 100/300/50? – Collision and Comprehensive – Uninsured/Underinsured – Medical payments Optional – Rental Car – Towing and Labor – Gap Auto Insurance – Liability - 100/300/50? – Collision and Comprehensive – Uninsured/Underinsured – Medical payments Optional – Rental Car – Towing and Labor – Gap Know your state requirements! 6

7. Y O U R I N S U R A N C E N E E D S7 Ways to Save on Car Insurance Do not buy car insurance from your car dealership Comparison Shop - check 3 companies Increase your deductibles Tickets, claims and accidents make a BIG difference in cost Be selective when lending your car Do not buy car insurance from your car dealership Comparison Shop - check 3 companies Increase your deductibles Tickets, claims and accidents make a BIG difference in cost Be selective when lending your car 7

8. Y O U R I N S U R A N C E N E E D S8 Ways to Save (cont.) Maintain coverage while on deployment Coordinate coverage Ask for discounts – Good Driver Discount – Safe Vehicle Discount – Good Student Discount – Low Mileage Discount – Internet Discount Check your credit report Maintain coverage while on deployment Coordinate coverage Ask for discounts – Good Driver Discount – Safe Vehicle Discount – Good Student Discount – Low Mileage Discount – Internet Discount Check your credit report 8

9. Y O U R I N S U R A N C E N E E D S9 Getting Married Renters Policy Auto Policy Dental Health Program Health/TRICARE Enrollment - DEERS Life Insurance – Number of Wage Earners in Your Family – Change Your SGLI Beneficiary Form Renters Policy Auto Policy Dental Health Program Health/TRICARE Enrollment - DEERS Life Insurance – Number of Wage Earners in Your Family – Change Your SGLI Beneficiary Form Review all policies and adjust as necessary. 9

10. Y O U R I N S U R A N C E N E E D S10 Having Children Life Insurance – Needs change dramatically FSGLI – Spouse - up to $100,000, cost based on age, monthly premiums deducted from members pay – Children - $10,000 free TRICARE Enrollment Dental – When to enroll Life Insurance – Needs change dramatically FSGLI – Spouse - up to $100,000, cost based on age, monthly premiums deducted from members pay – Children - $10,000 free TRICARE Enrollment Dental – When to enroll Review all policies and adjust as necessary. 10

11. Y O U R I N S U R A N C E N E E D S11 Buying a Home Homeowners Insurance – Cover your home – Cover your personal property – Cover your back side! Liability – Ask for replacement cost Life Insurance – Needs increase based on the mortgage Homeowners Insurance – Cover your home – Cover your personal property – Cover your back side! Liability – Ask for replacement cost Life Insurance – Needs increase based on the mortgage 11

12. Y O U R I N S U R A N C E N E E D S12 Increasing Assets Umbrella Insurance – Is it necessary? – Asset protection – Inexpensive – Coordinate with other coverages Long Term Care – Consider between 50-55 Umbrella Insurance – Is it necessary? – Asset protection – Inexpensive – Coordinate with other coverages Long Term Care – Consider between 50-55 Review all policies and adjust as necessary. 12

13. Y O U R I N S U R A N C E N E E D S13 Divorce All policies need to be reviewed and re-issued in your name Life Insurance – Plans for children – Other issues Review and update beneficiary designations (different from your Page 2!) All policies need to be reviewed and re-issued in your name Life Insurance – Plans for children – Other issues Review and update beneficiary designations (different from your Page 2!) 13

14. Y O U R I N S U R A N C E N E E D S14 Retirement/Separation Life – SGLI to VGLI Conversion – SGLI to Commercial Policy – Replace with New Insurance Health/Dental – Retiree Enrollment required – Supplemental Policy Disability – Cover 60-80% of your annual income Life – SGLI to VGLI Conversion – SGLI to Commercial Policy – Replace with New Insurance Health/Dental – Retiree Enrollment required – Supplemental Policy Disability – Cover 60-80% of your annual income 14

15. Y O U R I N S U R A N C E N E E D S15 Survivor Benefits for Active Duty Death gratuity ($100,000) SGLI ($400,000) DIC Social Security $255 Lump Sum Childrens benefit VA Education Benefits Death gratuity ($100,000) SGLI ($400,000) DIC Social Security $255 Lump Sum Childrens benefit VA Education Benefits SBP Basic Funeral & Family Transportation No-Cost Final Move BAH or Housing (12 months) Pay for Unused Leave & Arrears in Pay SBP Basic Funeral & Family Transportation No-Cost Final Move BAH or Housing (12 months) Pay for Unused Leave & Arrears in Pay 15

16. Y O U R I N S U R A N C E N E E D S16 Shopping Tips Know what you need Compare costs and benefits Understand your policy (ask lots of questions) Dont be talked into anything – wait a few days to make a final decision Know what you need Compare costs and benefits Understand your policy (ask lots of questions) Dont be talked into anything – wait a few days to make a final decision Remember – Its Your Money! 16

17. Y O U R I N S U R A N C E N E E D S17 Focus on Life Insurance: How Much Do You Need? A balance between what existing insurance and assets you currently have and what needs will arise if you die. Check out the Life Insurance Needs Calculator at www.va.gov. A balance between what existing insurance and assets you currently have and what needs will arise if you die. Check out the Life Insurance Needs Calculator at www.va.gov. 17

18. Y O U R I N S U R A N C E N E E D S18 Focus on Life Insurance: What kind do you need? Funeral Expenses and Personal Debts Spousal Income Mortgage Childs Income College Fund Estate Planning 20 40 60 80 Birth Death Whole Life Insurance Term Insurance 18

19. Y O U R I N S U R A N C E N E E D S19 Term Insurance Protection for a limited period of time Face amount paid if insured dies during specified period Typically 1, 5, 10, 15, 20 year terms Premiums generally level for entire term Premiums low when young, much higher when older SGLI/FSGLI are term insurance There is no cash value Protection for a limited period of time Face amount paid if insured dies during specified period Typically 1, 5, 10, 15, 20 year terms Premiums generally level for entire term Premiums low when young, much higher when older SGLI/FSGLI are term insurance There is no cash value 19

20. Y O U R I N S U R A N C E N E E D S20 Permanent Insurance Aka Cash Value Three major types – Whole Life Premiums much higher than term in early years Has cash value Policy in effect as long as premiums are paid – Universal Life More flexible than while life Can stop or reduce premiums Cash value earns interest – Variable Universal Life Like Universal life, but with investment options Higher risk Aka Cash Value Three major types – Whole Life Premiums much higher than term in early years Has cash value Policy in effect as long as premiums are paid – Universal Life More flexible than while life Can stop or reduce premiums Cash value earns interest – Variable Universal Life Like Universal life, but with investment options Higher risk 20

21. Y O U R I N S U R A N C E N E E D S21 Comparison Advantages: Term Lower cost Good for limited duration needs Whole Life Insurance for life Builds cash value Additional features Tax deferred growth Advantages: Term Lower cost Good for limited duration needs Whole Life Insurance for life Builds cash value Additional features Tax deferred growth Disadvantages: Term No cash value Cost increases with age Whole Life Much higher cost in earlier years More complexity Generally low return Disadvantages: Term No cash value Cost increases with age Whole Life Much higher cost in earlier years More complexity Generally low return 21

22. Y O U R I N S U R A N C E N E E D S22 Common Mistakes Not understanding its purpose Buying as a savings vehicle Not understanding what you are buying Too much trust in the agent Holding a policy forever Buying unnecessary insurance Being talked into buying Not understanding its purpose Buying as a savings vehicle Not understanding what you are buying Too much trust in the agent Holding a policy forever Buying unnecessary insurance Being talked into buying Buy insurance, dont be sold it! 22

23. Y O U R I N S U R A N C E N E E D S23 Organize Your Records Record Important Information! Keep a Copy at Home! Keep a Copy in a safe place off- site! Take care of your survivors! 23

24. Y O U R I N S U R A N C E N E E D S24 Your Insurance Needs Determine your needs according to life-cycle events With every event, review all insurance Shop around for the best deal Buy insurance, dont let it be sold to you Use the VAs Life Insurance Needs calculator Organize your insurance records Determine your needs according to life-cycle events With every event, review all insurance Shop around for the best deal Buy insurance, dont let it be sold to you Use the VAs Life Insurance Needs calculator Organize your insurance records 24

25. Y O U R I N S U R A N C E N E E D S25 Print Your Certificate Click on the following link to add your name to the certificate and print it: Your Insurance Needs