understanding your risks...• cash value guaranteed as long as policy kept in force • may pay a...
TRANSCRIPT
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Understanding Your Risks: Protecting your income and
lifestyle with insurance! Presented By: Ross Karp, CLTC
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What is the best-selling multiplayer board game in America?
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What do you receive for passing GO?
$200
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Why did you receive $200?
It is your salary.
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What happens in Monopoly when you go to Jail?
You can’t collect any money.
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Agenda:
• What are people’s concerns (what do they want to protect)?
• Why use insurance? • How much do I need? • Types of insurance:
- Life • Term vs. Permanent
- Disability Insurance - Long Term Care Insurance
• Additional Benefits of Life Insurance
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Why do people work hard?
• Buy home
• Vacation
• Children’s education
• Clothes
• Repay education loans
• Create lifestyle for ourselves and our family
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What can get in the way?
The M&Ms
Mortality & Morbidity
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Life Insurance
• Term Insurance
• Permanent Insurance
− Whole life
− Universal life
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Life Insurance • Term
− Advantages
• Low initial premium, level term period
• Suited for short term/temporary need
• Increased premium if renewed after term
− Disadvantages
• Premiums in future may become prohibitively expensive
• Coverage may cease
• Does not build cash value
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Life Insurance • Permanent (Whole Life)
-Advantages
• Guaranteed lifetime protection
• Fixed premium
• Cash value guaranteed as long as policy kept in force
• May pay a policy dividend
- Disadvantages
• No premium flexibility
• Conservative potential compared to investment vehicles
• Death benefit may not keep pace with inflation
• Significantly more expensive
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Life Insurance • Universal Life
− Advantages
• Lifetime protection
• Premium flexibility
• Cash value growth reflects current interest rates with minimum guarantees
− Disadvantages
• Premium may increase as insured gets older
• In a low interest environment, growth may be disappointing
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Additional Benefits
• Family Protection
• Deferring Financial Risk
• Income-Tax Free Benefit
• Policy Loans, Dividends
• Charitable Giving
• Special Needs Planning
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Your most valuable asset is probably underinsured.
You insure…
Your home Your car But what about your income?
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Everything Rests on Income
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Other Financial Means How would you replace your lost income?
• Savings?
− One year of disability can wipe out 10 years of savings
• Borrow?
− What bank would lend money if you were disabled and unemployed?
• Social Security?
− To qualify, your disability must be expected to last at least 12 months or end in death.
• Other Income?
− Could you maintain your standard of living without placing additional strain on yourself and family?
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Disability Insurance • If you couldn’t physically go to work…
− How long would your savings last?
− Would your spouse/partner’s income make up the shortfall?
− What lifestyle changes would your family need to make?
− Future about dreams…Travel, college, comfortable retirement?
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Causes of Disability
• Accident – 10.3%
• Cancer – 14.6%
• Cardiovascular – 9.1%
• Maternity-related – 5.1%
• Mental/Psychiatric – 9.1%
• Musculoskeletal – 27.5%
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Disability Insurance
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Personal Long Term Disability
• Provides income stream monthly
• Tax free if paid with post-tax dollars
• Cost of living adjustment
• Residual benefit for when you start back at work
• Catastrophic benefit
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Insurance for Small Business Owners
• Buy/Sell Agreement Funding
• Key man insurance protection
• Business overhead expense protection
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Long Term Care Insurance • What are your activities of daily living?
• Transferring • Bathing • Dressing • Feeding oneself • Toileting • Continence
• What if you needed care? In home or a facility? • Where would those funds come from?
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What is Long Term Care?
• Long term care can be broadly defined as:
• Care provided by another party for the benefit of those who are unable to care for themselves
• Usually provided for an extended period of time
Long term care is personal care assistance.
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Long Term Care is Not Only About You… It is about you and your family.
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Long Term Care Insurance
• Pays for covered custodial and community care
• Benefits are paid for covered care you receive
• Helps to protect your financial strategies
Long term care insurance doesn’t replace the need for care – it builds on it, allowing the caregiver to take care of you better and for longer.
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Where is Long Term Care Delivered?
• Where you need it.
• Not just in nursing homes.
• Often in your own home.
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What to Look for in a Long Term Care Insurance Policy
Basic Policy Features
Benefit Amount • Applied as daily or monthly amount
Elimination Period • How long is the “deductible”? • How many choices?
Home Care Cost of Living Adjustments
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QUESTIONS
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Thank You!
Ross Karp 3P Insurance Services
914-443-9709 http://finsecurity.com/rkarp