Your Insurance Needs

1. Your Insurance Needs

2. Purpose of Insurance To provide protection from financial loss. Your Choices: Avoid Risk Reduce Risk Retain Risk Transfer Risk

3. The Life-Cycle Approach to Insurance Needs • Major Life Events Determine Needs • Housing Situations • Family Situations • Accumulation of Assets • Retirement • Death • Are you covered?

4. Single in Quarters • Renter’s Policy: • What’s covered in Government Quarters? • Life Insurance: • Is anyone else depending on your income? • Final Expenses only - SGLI is enough

5. Moving Off-Base Renter’s Policy Make sure your property is covered at all times, at replacement cost levels!

6. Buying a Car Know your state requirements! • Auto Insurance • Liability - 100/300/50? • Collision and Comprehensive • Uninsured/Underinsured • Medical payments • Optional • Rental Car • Towing and Labor • Gap

7. 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

8. 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

9. Getting Married Review all policies and adjust as necessary. • Renter’s Policy • Auto Policy • Dental Health Program • Health/TRICARE Enrollment - DEERS • Life Insurance • Number of Wage Earners in Your Family • Change Your SGLI Beneficiary Form

10. Having Children Review all policies and adjust as necessary. • Life Insurance • Needs change dramatically • FSGLI • Spouse - up to $100,000, cost based on age, monthly premiums deducted from member’s pay • Children - $10,000 free • TRICARE Enrollment • Dental • When to enroll

11. Buying a Home • Homeowner’s 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

12. Increasing Assets Review all policies and adjust as necessary. • “Umbrella” Insurance • Is it necessary? • Asset protection • Inexpensive • Coordinate with other coverages • Long Term Care • Consider between 50-55

13. 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!)

14. 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

15. Survivor Benefits for Active Duty • SBP • Basic Funeral & Family Transportation • No-Cost Final Move • BAH or Housing (12 months) • Pay for Unused Leave & Arrears in Pay • Death gratuity ($100,000) • SGLI ($400,000) • DIC • Social Security • $255 Lump Sum • Children’s benefit • VA Education Benefits

16. Shopping Tips Remember – It’s Your Money! Know what you need Compare costs and benefits Understand your policy (ask lots of questions) Don’t be talked into anything – wait a few days to make a final decision

17. 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.

18. Focus on Life Insurance:What kind do you need? Funeral Expenses and Personal Debts Spousal Income Mortgage Birth Death Child’s Income College Fund Estate Planning 20 40 60 80 Whole Life Insurance Term Insurance

19. 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

20. 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

21. Comparison • Disadvantages: • Term • No cash value • Cost increases with age • WholeLife • Much higher cost in earlier years • More complexity • Generally low return Advantages: Term • Lower cost • Good for limited duration needs Whole Life • Insurance for life • Builds cash value • Additional features • Tax deferred growth

22. Common Mistakes Buy insurance, don’t be sold it! 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

23. Organize Your Records Keep a Copy in a safe place ‘off-site’! Keep a Copy at Home! Take care of your survivors! Record Important Information!

24. 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, don’t let it be ‘sold’ to you Use the VA’s Life Insurance Needs calculator Organize your insurance records

25. Print Your Certificate Click on the following link to add your name to the certificate and print it: Your Insurance Needs