I. Life insurance.
How is life insurance used in estate planning?
methods used by financial planners to estimate the appropriate amount of life
How should people decide how much life insurance to carry? What are the main
insurance? Compare and contrast these methods—with examples
Insurance selection for the family. What insurance should families purchase and
The various types of life insurance policies and how they differ: (1) term
The need for life insurance
What is life insurance and how does it work?
insurance, (2) whole life insurance, and (3) universal life insurance
-Premature Death: death of a family head with outstanding unfulfilled financial obligation
-dependents to support, children to educate, mortgage to pay off
-premature death -> can cause lots of financial problems for survivors
-costs of p.death:
-future earnings of breadwinner
-expenses -> funeral, uninsured medical bills, estate settlements
-reduction in standard of living
-noneconomic -> grief, loss of role model, counseling for children
-p.death has been declining -> increased life expectancy
-2007 life expectancy 77.9 yrs
-1970 -> 70.8 (9.1% lower)
-rise from medical science, rising income/econ growth, improvements in public health/sanitation
-Economic justification for life insurance
-justified if insured has earned income, and others are dependent on that for part/all of their financial support
-Financial Impact for different types of families
-Single People -> don’t need large amounts of insurance
-Single-parent -> need large amounts of insurance on family head
-Two-income Earners w/ Children -> both earners need substantial amount
-Traditional families -> working parent in labor force needs substantial amounts
-Blended families (divorced remarries w/ another and both have kids from separate marriages) -> need for insurance on both heads
-Sandwiched Families -> son/daughter that has kids provides support to...