1 / 43

Financial Smarts

Financial Smarts. For Teachers. Sponsors. Risk Management. Shared Risks. Accept Need to Manage Risks Identify potential risks Find other ways to manage Have a risk management program. Financial Impact. NO INSURANCE. Death of Child. Loss of Home. Dental/Eye Care. Automobile.

ursula-ball
Download Presentation

Financial Smarts

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Financial Smarts For Teachers

  2. Sponsors

  3. Risk Management

  4. Shared Risks Accept Need to Manage Risks • Identify potential risks • Find other ways to manage • Have a risk management program

  5. Financial Impact NO INSURANCE Death of Child Loss of Home Dental/Eye Care Automobile

  6. Types of Risk • Personal • Property • Liability

  7. Risk Options • Minimize • Accept • Transfer

  8. Compare Policies • Who/what covered • Deductibles • High deductible = low premium • Low deductible = high premium • Length of coverage • Exclusions • Discounts

  9. Check Ratings • A.M. Best Company • A + is Superior • C - is Fair • Moody’s Investor Service • Aaa is Exceptional • Ca is Extremely Poor • Standard & Poor’s Corp • AAA is Superior • C is Speculative

  10. Automobile Policies • Liability • Personal Injury • Collision • Comprehensive • Medical Payments • Uninsured motorist • Underinsured motorist

  11. Liability Insurance • Bodily injury: 15/30 (minimum) • Property damage: /5 (minimum) • Recommended: 300/500/100

  12. Liability Insurance Features • Medical payments • Helps pay medical, funeral bills • Usually $500 to $10,000 • Extended benefits • Pays some medical, funeral bills • Reimburses portion of lost wages • Pays for some essential services

  13. Liability Insurance Features • Collision (damages to your car) • Comprehensive physical damage • Uninsured motorist • Covers accidents caused by people with no insurance • Collision Deductible Waiver • Underinsured motorist • Pays your expenses after other driver’s coverage is gone

  14. Homeowner’s Insurance Packaged Policies • House • Personal liability • Additional living expenses • Personal property • Medical payments

  15. Property • Real property or physical structures • Personal property • Jewelry • Computers • Artwork • Television • Other valuables

  16. Real Property Market Value? or Replacement Cost? (Rebuild at Current Prices)

  17. Full Insurance At Least 80% of Replacement Cost or Amount Insurance Company SaysIs “Fully Insured”

  18. Other Considerations • Guaranteed Replacement Cost: Pays to rebuild at “today’s” prices • Law and Ordinance Coverage: Pays to bring house up to today’s building codes

  19. Other Considerations • Personal property • Usually limited to 50% of dwelling’s value • Purchase riders to cover most expensive items • Living expenses • Flood insurance • Earthquake insurance

  20. Renter’s Insurance • Loss of personal property • Loss of use of rental unit • May cover • Liability • Medical

  21. Liability Insurance Umbrella Coverage • Injuries to others on your property • Claims against rental properties you own • Liability doing volunteer work • Accidents with recreational equipment • Claims against you for unforeseen loss • Libel

  22. Liability Insurance • High deductible • Kicks in after other insurance resources tapped • Costs $200 – $300 per $1 million

  23. Liability Insurance How Much Is Enough? At Least Net Worth If Not More!

  24. Health Insurance In Event of Illness, Injury

  25. HMOs • Prepaid health service plans • Alternatives to group plans • Offer comprehensive health services • Usually haveassigned doctor

  26. Preferred Provider • Group plan • Lets you choose amonga list of “preferred providers” • Usually co-pay for visits

  27. Life Insurance Reasons to Buy • Financial support for dependents when you die • Financial protection for retirement years

  28. Life Insurance Terminology • Insured Person:Person whose life is being insured • Beneficiary:Person who receives the cash value of the life insurance policy

  29. Life Insurance Types of Policies • Term • Whole Life • Limited Pay Life • Variable Life • Universal Life

  30. Life Insurance Term Insurance • Protection for a specific period of time 5, 10, 20 years • Need • Guaranteed renewable • Convertible • Price increases with age

  31. Life Insurance Whole Life • Death protection throughout life • Premiums stay the same • Builds cash value • Earnings are tax-deferred

  32. Life Insurance Before Buying • Evaluate your needs • Read the policy • Understand coverageyou are buying

  33. Life Insurance What to Do? Buy Term Invest the Difference!

  34. Annuities Provide Income as Long as You Live • Immediate Annuity Lump sum/periodic payments • Deferred Annuity (most common) • Your money accumulates interest • Periodic payments after retirement • Income tax on interest deferred

  35. Annuities Options • Life Annuity (pays as long as you live) • Period Certain (pays for a set period) • Life with Period • Pays as long as you live • Survivor gets income until end of period • Joint and Survivor • Pays as long as you live • Survivor gets percentage as income for life

  36. Deferred Annuities Two Types • Fixed • Money accumulates at minimum rate • May pay higher rate if investments are good • Variable • Contract owner (you) determine investments • Risky, but chance of greater return • Some annuities combine both

  37. Long-Term Care Insurance Coverage • Care in non-acute care facility • Nursing home • Residential care facility (assisted living) • Home care • Community-based care

  38. Long-Term Care Insurance Policies Available in California • Nursing Facility and Residential Care Facility Only • Home Care Only • Comprehensive Long-Term Care • Nursing facility care • Assisted living care • Home and community care.

  39. Long-Term Care Insurance When Do Policies Pay? • Impairment in activities of daily living • Impaired in at least two activities • Need assistance or supervision for those activities • Impairment in cognitive ability • Medical necessity

  40. Disability Insurance California State Disability Insurance • Travels with worker • Mandatory for most California workers • Non-exclusionary Cannot be canceled or denied because of health risk factors, pre-existing medical conditions, or hazardous employment

  41. Disability Insurance California State Disability Insurance • Pays up to 52 weeks Weekly benefit approximately 55% of earnings in highest quarter of your base period

  42. Disability Insurance Supplemental Insurance • Offers long-term coverage • Kicks in after SDI • May provide 70%–80% of base income • Lasts for set period or until retirement • Benefits tax free (if you pay for policy)

  43. Insurance Minimizes Financial Loss

More Related