Insurance

1. Insurance Chapter 11

2. Purpose of insurance is to transfer risk • Can deal with risk by • Avoiding it • Reducing it • Dealing with it • Transferring it • Without insurance, losses can bankrupt you • 3 Risks • Personal: loss of income / standard of life • Property: loss / damage of items • Liability: could owe others Page 157

3. If have an emergency fund, raise your deductable • True on all insurance, will lower premium • Premium = what you pay monthly to be insured • Consider dropping collision on your car • Homeowner’s should be “guaranteed replacement cost” • Have $ value = 20% over home value • Umbrella liability policies are good, must have max coverage on autos Homeowner’s and Auto Insurance

4. Increase your deductible and / or your coinsurance • Increase your Stop-Loss • See if an HSA works with your plan • HSA is a health savings account for medical expenses, is tax – sheltered savings account Health Insurance

5. Disability insurance is designed to replace income • Pays if you cannot perform job educated or trained to do • Called Occupational or “own occ” • Beware of short term policies covering less than 5 years • Coverage should be for 65% of your income • Elimination period is time between event & payment • Longer elimination period will lower premium Disability Insurance

6. Long-Term Care Insurance • Long-term care insurance is for Nursing home, assisted living or in-home care • 69% of people over 65 will require long-term ID Theft • Don’t buy protection that only monitors • Good protection includes restoration services that assign a counselor to clean up the mess

7. Will come back to life insurance • Credit Life and disability • Credit card protection • Cancer and hospital indemnity • Accidental death • Insurance with cash value • Pre-paid burial policies • Mortgage life insurance • Any kind of duplicate coverage Insurance to Avoid, page 164