1. Chapters 22-24 Insurance, Retirement, and Estate Planning

2. Insurance Terms: Insurance-protection against possible loss. Insurance-protection against possible loss. Policy-the contract for insurance. Policy-the contract for insurance. Premium-the amount or fee paid for coverage. Premium-the amount or fee paid for coverage. Deductible-amount paid by you before insurance will pay. Deductible-amount paid by you before insurance will pay. Risk-chance of loss or injury. Risk-chance of loss or injury. Peril Peril Hazard Hazard Negligence-carelessness Negligence-carelessness

3. Risk-Management Methods Risk Avoidance Risk Avoidance Risk Reduction Risk Reduction Risk Assumption Risk Assumption Risk Shifting Risk Shifting

4. Planning an Insurance Program 1. Set Insurance Goals 2. Develop a plan 3. Put plan into action 4. Review Results

5. Types of Insurance Auto Auto Health Health Home Home Life Life

6. Homeowner’s Insurance Property and Liability Insurance Property protects your own personal loss. Property protects your own personal loss. Liability protects you from being sued and other people to be compensated or fixed. Liability protects you from being sued and other people to be compensated or fixed. –Legal responsibility

7. Home and Property Insurance Personal Property Personal Property –Take Inventory –Floater Liability Liability –Medical payments coverage Specialized coverage Specialized coverage –Floods –Earthquakes

8. Renters Insurance Covers only the contents of a home. Covers only the contents of a home.

9. How much do you need? Actual cash value Actual cash value Replacement value Replacement value What is not covered? What is not covered? –Table pg. 747

10. What factors determine cost? Pg. 748-749 Pg. 748-749 –Location –Structure –Amount –Discounts –Company

11. Auto Insurance Liability Liability –Bodily Injury Liability –Property Damage Liability Medical Payments Coverage Medical Payments Coverage Uninsured Motorist Uninsured Motorist Underinsured Motorist Underinsured Motorist Collision Collision Comprehensive Comprehensive

12. Coverage Expressed in Shorthand Bodily injury per person/bodily injury per accident/property damage liability Bodily injury per person/bodily injury per accident/property damage liability 50/100/10 50/100/10 100/300/50 100/300/50 Expressed in thousands Expressed in thousands

13. Motor Vehicle Bodily Injury Coverage Chapter 22 Home and Motor Vehicle Insurance Section 3Motor Vehicle Insurance

14. Auto Insurance Cont… What factors do insurance companies look at to figure your premiums? Pg. 757 What factors do insurance companies look at to figure your premiums? Pg. 757 Assigned Risk Plan Assigned Risk Plan No-fault insurance No-fault insurance

15. Coverage How much coverage do you need? How much coverage do you need? –Pg. 756 & 758

16. Health Insurance To provide coverage for medical payments. To provide coverage for medical payments. Group coverage Group coverage –HMO  Primary care physician –PPO  Deductible –POS  Co-pay Individual Plans (expensive) Individual Plans (expensive)

17. Health Insurance Cont… Government Health Care Government Health Care –Medicare (over 65) –Medicaid (low income)

18. Life Insurance To provide income for anyone who depends on it. To provide income for anyone who depends on it. Beneficiary Beneficiary Term Life-provides protection agiant loss for a specified term. Term Life-provides protection agiant loss for a specified term. Whole Life-permanent policy, pay specified premium for the rest of your life. Whole Life-permanent policy, pay specified premium for the rest of your life.

19. Choosing an Agent Employer-Sponsored Insurance Programs Employer-Sponsored Insurance Programs How do you chose an agent? How do you chose an agent? How do you file a claim? How do you file a claim?

20. Planning for Retirement Setting Long-Range Goals Setting Long-Range Goals Conducting a Financial Analysis Conducting a Financial Analysis Reviewing Assets Reviewing Assets

21. Think About: Living Expenses Living Expenses Standard of Livings Standard of Livings Housing Housing –Assisted Living

22. Plans Public Pension Public Pension –Social Security (disability, survivor, & retirement) Employer Retirement Plan Employer Retirement Plan –Pension (401K) –Most employers match contribution ERISA-states your own contributions are vested immediately ERISA-states your own contributions are vested immediately –Your employers portions takes a certain number of years to be vested between 3 to 10

23. Personal Retirement Plans Individual Retirement Accounts (IRA) Individual Retirement Accounts (IRA) –Traditional-taken out before taxes; therefore taxed when taken out –Roth-taken out after taxes; therefore NOT taxed when withdrawn Keogh plan-for self-employed individuals Keogh plan-for self-employed individuals Annuity Annuity

24. Estate Planning Terms: Will Will Testate Testate Heir Heir

25. Changes to a Will: Codicil Codicil –Must be signed and witnesses also Automatic Changes Automatic Changes –Divorce –Marriage –Birth or adoption of a child

26. State Statues Spouse is entitled to 1/3 to 1/2 of the estate Spouse is entitled to 1/3 to 1/2 of the estate The will must state if a child is intentionally left out. The will must state if a child is intentionally left out.

27. Dying without a will Intestate Intestate Statutes Statutes More expensive because court has to appoint someone to execute your wishes. More expensive because court has to appoint someone to execute your wishes. –Administrator –Administratrix

28. Settling an Estate You appoint a/an: You appoint a/an: –Executor (male) –Executrix (female) It is cheaper to die with a will. It is cheaper to die with a will.

29. Estate Planning Estate Estate Probate Court Probate Court Living Will Living Will Power of Attorney Power of Attorney