Presentation on theme: "Take Charge and Reach Your Goals. Insurance The PICPA The Pennsylvania Institute of Certified Public Accountants The PICPA is a professional association."— Presentation transcript:
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. Its 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 Its 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 youre married, size of your family, financial obligations, career stage and goals When youre 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 insurers financial strength at places like A.M. Best, Moodys and Standard & Poors 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 – Medigaps coverage – Long-Term Cares 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 whats 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-of- pocket 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 its not, you will still need some protection against the items you cant afford to lose.
Insurance Homeowners Insurance Whats 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 familys vehicles through one company Select highest deductible you can afford