Transcript Document
Take Charge and Reach Your Goals Insurance The PICPA The Pennsylvania Institute of Certified Public Accountants The PICPA is a professional association of more than 19,000 CPAs working together to improve the profession and serve the public interest. Insurance Types There are many types of insurance. It’s important to understand each one and how they work • Disability Insurance • Life Insurance • Long-Term Care Insurance • Health Insurance • Homeowners Insurance • Auto Insurance Insurance Disability Insurance Why do you need it? • The chances of being disabled for more than 3 months are greater than dying prematurely • Everyone who works should consider purchasing disability insurance • If something happens, how will you pay the bills? Insurance Disability Insurance When do you need it? • You can purchase disability insurance that guarantees lifetime coverage, but those are typically really expensive. • The common approach is to buy two to five-year policies up until age 65. Insurance Disability Insurance Where do you get it? • Usually two main places: Private insurer and Social Security or governmental program Insurance Life Insurances It’s many uses: • Replace loss of income that would occur in the event of your death • Can pay down debts that you may leave behind • Can pay final expenses and estate taxes • Can create an estate for heirs Insurance Life Insurance How much do you need? • Depends on many things including whether you’re married, size of your family, financial obligations, career stage and goals • When you’re young, probably not a great need for life insurance. • But if you have a family, the need for life insurance increases. Insurance Life Insurance Types of polices: permanent and term Insurance Life Insurance Permanent Life Insurance • Whole • Universal • Variable • Universal variable Insurance Life Insurance Term Life Insurance • Specific amount of time • Ranges from 1-30+ years • Will get nothing if you live past coverage period • Death beneficiary receives face of policy upon death during term Insurance Life Insurance Where can you buy it? • Your employer – through the group plan • A broker or directly from an insurance company • Check ratings services of insurer’s financial strength at places like A.M. Best, Moody’s and Standard & Poor’s to understand their financial strength. Insurance Long-Term Care Insurance Who needs it? • Millions of senior citizens, according to a survey by the Health Insurance Association of America • Due to increasing life expectancies and uncertainty surrounding Medicare and government • Cost of living in a nursing home for one year are estimated at about $70,000 Insurance Long-Term Care Insurance Types of policies: • Skilled care – Continuous, round-clock – Medicare coverage – Medigap’s coverage – Long-Term Care’s coverage Insurance Long-Term Care Insurance Intermediate • Needed occasionally • Medicare’s coverage • Medigap’s coverage • Long-Term Care’s coverage Insurance Long-Term Care Insurance Custodial • Assist in performing activities of daily living • Prof. medical skills not necessary • Only Long-Term Care coverage Insurance Long-Term Care Insurance Where do you get it? • Many private insurers have this • Also good idea to check out www.longtermcareinsurance.org for a list of quotes and answers to frequently asked questions. Insurance Health Insurance Understanding your policy: • You need to purchase your own plan, you should know what’s out there. • Be sure to read the contract to know what your policy covers. • Policies should mention pre-existing conditions, deductible, co-payment, family coverage, out-ofpocket maximum, and more. Insurance Health Insurance Several types of organizations: • HMO • PPO • POS • EPO Insurance Health Insurance Saving for expenses: • Flexible Spending • Health Care Reimbursement • Health Care Savings Insurance Health Insurance Save on expenses: • Use network • Generic drugs • Use ER only for emergencies • Ask about home testing Insurance Homeowners Insurance Homeowners insurance is often required by mortgage lender, but even if it’s not, you will still need some protection against the items you can’t afford to lose. Insurance Homeowners Insurance What’s commonly covered: • Coverage pertains to the cost of damage and often your living expenses while you wait for your home to be repaired • Most homeowners policies cover your personal property both on and off premises and they set specific dollar limits to certain items Insurance Homeowners Insurance Ways to reduce cost: • Depends on the amount of coverage you want • Shop around for the best price Insurance Auto Insurance Pennsylvania requires insurance, but it is a low minimum compared to many other states Insurance Auto Insurance Understanding you policy: • Collision covers your auto when it strikes an object • Comprehensive covers your car against physical damage not caused by a collision such as fire and theft • Exclusions – be sure you read this section so you understand what is not covered Insurance Auto Insurance Ways to reduce cost: • Insure your car with the same company that insures your home • Insure ALL your family’s vehicles through one company • Select highest deductible you can afford Insurance Questions?