Last Chapter Flashcards
what is an essential financial planning tool?
insurance
What is the purpose of insurance?
to transfer risk
what can happen without proper insurance?
losses can bankrupt you
What are the basic types of insurance coverage needed?
- homeowners
- auto insurance
- health insurance
- disability insurance
- long term care insurance
- identity theft protection
- life insurance
what should you raise if you have a full emergency fund?
raise your deductible
what should homeowners insurance be called?
guaranteed replacement cost.
what liability policy is good to buy once you have some assets?
umbrella
what are the top things to know about auto insurance?
your a statistic insurers differ don't just look at prices go beyond the basics demand discounts your insurers is not your friend prepare before you have to file a claim.
What are the keys to saving on health premiums
increase your deductible and coinsurance amount
increase your stop-loss, but never decrease your max pay.
see if an HSA, would make sense for your situation
What’s HSA?
Health Savings Account
What is HSA account good for?
a tax sheltered savings account for medical expenses that works with a high deductible insurance policy.
What is disability insurance designed to replace?
income lost due to short term or permanent disability.
What is occupational disability insurance?
insurance that pays if you cannot perform the job that you were educated or trained to do. available for only two years
what policies should you be aware of?
short term policies covering less than 5 years.
your insurance should be for what percentage of your current income?
65%
What is the elimination period?
the time between the disabling event and when the payments actually begin.
What happens with a longer elimination period?
a lower premium cost
what is long term care insurance for?
nursing home, assisted living facilities or in-home care.
What percentage of people over 65 will require long term care
69%
should you by identity theft protection that only provides credit report monitoring?
no
What does good identity theft protection include?
restoration services that assign a counselor to clean up the mess.
What is life insurance to replace?
lost income due to death.
What are the two types of life insurance?
term insurance
cash value insurance
what is term insurance?
a specified period, is cheaper and has no savings plan built into it.
What is cash value insurance?
normally for life and is more expensive because it funds a savings plan.
What is the most common insurance myth?
is that the need for life insurance is a permanent situation.
What does it mean to be self insured?
you are debt free, and have investments that have grown to a substantial amount.
Why should life insurance not be an investment?
- returns are historically low
- when you die with cash value, the insurance company keeps the cash value.
- the fees deducted from your return are extremely high.
what should you remember when purchasing life insurance?
buy only low cost level term do not forget your spouse stay away from fancy options children only need enough for bunal expenses you need about 10 times your income
What insurance should you avoid
- credit life and disability
- credit card protection
- career and hospital indemnity
- accidental death
- any insurance with cash
- prepaid bunal policies
- mortgage life insurance
- any kind of duplicate coverage
what is not an investment?
insurance
what is insurances only function?
to transfer risk
What must you have if you have a car?
auto insurance
what can raising you deductible save you money on
your premiums
the amount you pay for an insurance policy
.
costs that insurance doesnt cover. amount you pay
…
the amount of life insurance you should have is – times your income.
…
covers damage to a car if there is an accident
..
covers damge to a car if a tree falls on it.
………
the deductible on any insurance is the portion you have to pay before insurance covers any expenses
……
if you have an older car, you can consider dropping liability
…..
the purpose of insurance is to transfer risk
…
cash value is a good way to invest since it has savings plan inside it.
.
neither accidental death nor cancer insurance are good insurance policies to carry.
….
short term disabilities is covered by your emergency fund, so only buy long term disability.
……
the best type of identity theft insurance only provides credit report monitoring.
..
the time between the disabling event and the beginning of payments
….
life insurance policy for a specific period
..
what can you do to decrease the cost of insurance policies
…
covers restoration and monitoring services
..
covers damage to a vehicle
…..
covers the contents of an apartment
…..
designed to replace income lost if you cannot perform your job.
…..
covers assisted living, in-home or nursing home care
…….
designed to replace income lost due to death
….
