METROPOLITAN COMMUNITY COLLEGE
                           COURSE OUTLINE FORM

COURSE TITLE: Risk Management and Insurance...
TITLE: Risk Management & Insurance PREFIX/NO. FINA 2209

COURSE OBJECTIVES:
I.    Identify the principle concepts of risk,...
UNIT II.    Understand the characteristics, purpose, and use of individual life
                   insurance and annuities...
UNIT V.     Understand the characteristics, purpose, and use of long-term care
            insurance.
      A.    Explore ...
E.   Evaluate business uses of insurance including: buy-sell agreements, key employee
     life insurance, split-dollar li...
UNIT VIII. Identify tools and techniques utilized when selecting insurance
                  policies and companies.
     ...
CFP BOARD’S FINANCIAL PLANNING TOPIC LIST:
               REGISTERED PROGRAM COURSE ALIGNMENT

Below is a list of course e...
CFP BOARD’S FINANCIAL PLANNING TOPIC LIST:
           REGISTERED PROGRAM COURSE ALIGNMENT (continued)

Analysis and Evalua...
CFP BOARD’S FINANCIAL PLANNING TOPIC LIST:
         REGISTERED PROGRAM COURSE ALIGNMENT (continued)

Health Insurance and ...
CFP BOARD’S FINANCIAL PLANNING TOPIC LIST:
          REGISTERED PROGRAM COURSE ALIGNMENT (continued)

Income Taxation of L...
CFP BOARD’S FINANCIAL PLANNING TOPIC LIST:
          REGISTERED PROGRAM COURSE ALIGNMENT (continued)

Insurance Policy and...
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FINA 2209

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FINA 2209

  1. 1. METROPOLITAN COMMUNITY COLLEGE COURSE OUTLINE FORM COURSE TITLE: Risk Management and Insurance COURSE PREFIX AND NO. FINA 2209 LEC 4.5 LAB 0 CREDIT HOURS 4.5 COURSE DESCRIPTION: This course analyzes financial risk and the preservation of personal assets. Course content provides an overview of the risk management process with a primary focus on various lines of insurance (life, health, disability, long-term care, homeowners, auto, and liability). COURSE PREREQUISITES: None RATIONALE: The ability to assess risk and identify insurance products relevant to risk management is an essential financial planning tool. This course provides students with the background necessary to communicate with clients, identify risk exposure, and select tools and techniques to protect against loss. Risk exposures surveyed include health, life, disability, property and casualty, personal liability, and business liability. REQUIRED TEXTBOOKS: Title: Fundamentals of Risk and Insurance Edition: Current Authors: Emmett J. Vaughan & Theresa Vaughan Publisher: Wiley REQUIRED MATERIALS: Texas Instruments BAII Financial Calculator Attached course outline written by: Lori Lothringer, Ph.D., AFC Date: 12/08 Reviewed/Revised by: Lori Lothringer_ Date: 3/09 Effective quarter of course outline: 09/FA Dean ___________________________________ Date _______________ Daryl Hansen Course Objectives, Topical Unit Outlines, and Unit Objectives must be attached to this form. COURSE OBJECTIVES/TOPICALUNIT OUTLINE/UNIT OBJECTIVES 1
  2. 2. TITLE: Risk Management & Insurance PREFIX/NO. FINA 2209 COURSE OBJECTIVES: I. Identify the principle concepts of risk, risk management and insurance and evaluate risk exposures. II. Understand the characteristics, purpose, and use of individual life insurance and annuities. III. Understand the characteristics, purpose, and use of disability income insurance. IV. Understand the characteristics, purpose, and use of health insurance. V. Understand the characteristics, purpose, and use of long-term care insurance. VI. Understand the characteristics, purpose, and use of property, casualty, and liability insurance for the individual. VII. Understand the characteristics, purpose, and use of property and liability insurance for the business, and evaluate the business uses of insurance. VIII. Identify tools and techniques utilized when selecting insurance policies and companies. TOPICAL UNIT OUTLINE/UNIT OBJECTIVES: UNIT I. Identify the principle concepts of risk, risk management and insurance and evaluate risk exposures. A. Explain the principle of risk and insurance defining critical terminology including but not limited to peril, hazard, law of large numbers, adverse selection, insurable risks, and self-insurance. B. Explore the risk management process and evaluate various risk management tools and techniques including risk control (e.g. risk avoidance, risk diversification, risk reduction) and risk financing (risk retention and risk transfer). C. Analyze and evaluate risk exposures including personal (e.g. death, disability, health, unemployment, and superannuation), property (auto and home), liability, and business-related. D. Examine how insurance products (policies, annuities, etc.) can be used to manage risk. E. Identify relevant legal and regulatory aspects of insurance including: principle of indemnity, insurable interest, contract requirements, contract characteristics, policy ownership, designation of beneficiary, regulatory structure, areas of regulation, and function of regulatory authority. 2
  3. 3. UNIT II. Understand the characteristics, purpose, and use of individual life insurance and annuities. A. Recognize the concepts and personal uses of life insurance and identify various policy types of insurance. B. Identify standard provisions of life insurance (e.g. contractual provisions, dividend options, nonforfeiture options, settlement options, illustrations, and policy replacement). C. Understand the characteristics, purpose, and use of viatical and life settlements. D. Analyze life insurance needs and apply best method approaches when selecting insurance policies to meet said needs. E. Explore the income taxation of life insurance (e.g. dividends, withdrawals and loans, death benefits, modified endowment contracts, transfer-for- value, and §1035 exchanges). F. Classify the types of annuities and evaluate the appropriateness of use inconsideration of financial planning objectives (investment, taxation, retirement, estate). UNIT III. Understand the characteristics, purpose, and use of disability income insurance. A. Recognize the various definitions of disability. B. Identify standard provisions of individual disability income insurance (e.g. benefit period, elimination period, benefit amount, and provisions). C. Analyze disability income insurance needs and apply best method approaches when selecting insurance policies to meet said needs. D. Explore the taxation of premiums and benefits specific to disability income insurance. UNIT IV. Understand the characteristics, purpose, and use of health insurance. A. Explore the history and background of health insurance and identify current issues and concerns associated with the industry (e.g. health care costs and management). B. Identify the types of individual health insurance coverage. C. Analyze the characteristics, purpose, and use of hospital, surgical, and physicians’ expenses insurance. D. Recognize the characteristics, purpose, and use of major medical insurance and determine how benefits are calculated. E. Understand the purpose and application of continuance and portability. F. Describe the characteristics, purpose, and use of Medicare. G. Analyze health insurance needs and apply best method approaches when selecting insurance policies to meet said needs. H. Explore the taxation of premiums and benefits specific to health insurance. 3
  4. 4. UNIT V. Understand the characteristics, purpose, and use of long-term care insurance. A. Explore standard provisions of long-term care insurance (e.g. eligibility, services covered, Medicare limitations, benefit period, elimination period, benefit amount, and provisions). B. Analyze long-term care insurance needs and apply best method approaches when selecting insurance policies to meet said needs. C. Explore the taxation of premiums and benefits specific to long-term care insurance. UNIT VI. Understand the characteristics, purpose, and use of property, casualty, and liability insurance for the individual. A. Recognize the characteristics, purpose, and use of automobile insurance. B. Analyze automobile insurance needs and apply best method approaches when selecting insurance policies to meet said needs. C. Recognize the characteristics, purpose, and use of homeowners and other personal forms property insurance. D. Analyze homeowners and other personal forms of property insurance needs and apply best method approaches when selecting insurance policies to meet said needs. E. Understand concepts associated with negligence and legal liability (e.g. criminal and tortuous behavior). F. Recognize the characteristics, purpose, and use of general liability insurance (i.e. umbrella insurance) for the individual. G. Analyze general liability insurance needs for the individual and apply best method approaches when selecting insurance policies to meet said needs. UNIT VII. Understand the characteristics, purpose, and use of property and liability insurance for the business, and evaluate the business uses of insurance. A. Recognize the characteristics, purpose, and use of commercial property insurance. B. Analyze commercial property insurance needs and apply best method approaches when selecting insurance policies to meet said needs. C. Recognize the characteristics, purpose, and use of commercial liability insurance (e.g. auto, umbrella, professional, directors and officers, and workers’ compensation and employers). D. Analyze commercial liability insurance needs and apply best method approaches when selecting insurance policies to meet said needs. 4
  5. 5. E. Evaluate business uses of insurance including: buy-sell agreements, key employee life insurance, split-dollar life insurance, and business overhead expense insurance. 5
  6. 6. UNIT VIII. Identify tools and techniques utilized when selecting insurance policies and companies. A. Explore the purpose of insurance coverage. B. Examine how the duration of coverage is identified. C. Describe tools and techniques utilized when selecting insurance companies (e.g. participating or non-participating, cost-benefit analysis). D. Evaluate the financial strength industry participants using insurance ratings. E. Explain the role of underwriting. COURSE OBJECTIVES/ASSESSMENT MEASURES COURSE OBJECTIVES ASSESSMENT MEASURES Identify the principle concepts of risk, risk Team project, oral report/presentation, test, management and insurance and evaluate risk team testing, portfolio construction, case exposures. analysis. Understand the characteristics, purpose, Team project, oral report/presentation, test, and use of individual life insurance and team testing, portfolio construction, case analysis. annuities. Understand the characteristics, purpose, Team project, oral report/presentation, test, and use of disability income insurance. team testing, portfolio construction, case analysis. Understand the characteristics, purpose, Team project, oral report/presentation, test, and use of health insurance. team testing, portfolio construction, case analysis. Understand the characteristics, purpose, Team project, oral report/presentation, test, and use of long-term care insurance. team testing, portfolio construction, case analysis. Understand the characteristics, purpose, Team project, oral report/presentation, test, and use of property, casualty, and team testing, portfolio construction, case analysis. liability insurance for the individual. Understand the characteristics, purpose, Team project, oral report/presentation, test, and use of property, casualty, and team testing, portfolio construction, case analysis. liability insurance for the individual. Identify tools and techniques utilized when Team project, oral report/presentation, test, selecting insurance policies and companies. team testing, portfolio construction, case analysis. Technology Tool: Students will utilize internet resources to explore basic risk management and insurance information. International Dimension: Students will investigate how issues pertaining to risk management and insurance are treated in various countries and cultures. Ethical Breadth: Students will explore ethical issues related to risk management and insurance. 6
  7. 7. CFP BOARD’S FINANCIAL PLANNING TOPIC LIST: REGISTERED PROGRAM COURSE ALIGNMENT Below is a list of course elements included on the Topic List for CFP® Certification Examination. Approximately 14% of the exam questions will be linked to one of the following concepts. Questions may be at the evaluation level, which is the highest cognitive level in Bloom's taxonomy, or at any lower level. Questions often will be asked in the context of the financial planning process. References to sections (§) in this list refer to sections of the Internal Revenue Code. Principles of Risk and Insurance Topic MCC Course Outline Unit(s) A. Definitions Unit I: Identify the principle B. Concepts concepts of risk, risk management a. Peril and insurance and evaluate risk b. Hazard exposures. c. Law of large numbers d. Adverse selection e. Insurable risks f. Self insurance C. Risk management process D. Response to risk a. Risk control b. Risk avoidance c. Risk diversification d. Risk reduction e. Risk financing f. Risk retention g. Risk transfer E. Legal aspects of insurance a. Principle of indemnity b. Insurable interest c. Contract requirements d. Contract characteristics e. Policy ownership f. Designation of beneficiary 7
  8. 8. CFP BOARD’S FINANCIAL PLANNING TOPIC LIST: REGISTERED PROGRAM COURSE ALIGNMENT (continued) Analysis and Evaluation of Risk Exposures Topic MCC Course Outline Unit(s) A. Personal Unit I: Identify the principle a. Death concepts of risk, risk management b. Disability and insurance and evaluate risk c. Poor health exposures. d. Unemployment e. Superannuation Unit VI: Understand the B. Property characteristics, purpose, and use a. Real of property, casualty, and b. Personal liability insurance for the c. Auto individual. C. Liability a. Negligence b. Intentional torts Unit VII. Understand the c. Strict liability characteristics, purpose, and use D. Business-related of property and liability insurance for the business, and evaluate the business uses of insurance. Property, Casualty and Liability Insurance Topic MCC Course Outline Unit A. Individual Unit VI: Understand the a. Homeowners insurance characteristics, purpose, and use b. Auto insurance of property, casualty, and c. Umbrella liability insurance liability insurance for the B. Business individual. a. Commercial property insurance b. Commercial liability insurance Unit VII: Understand the i. Auto liability ii. Umbrella liability characteristics, purpose, and use iii. Professional liability of property, casualty, and iv. Directors and officers liability liability insurance for the v. Workers' compensation individual. and employers liability 8
  9. 9. CFP BOARD’S FINANCIAL PLANNING TOPIC LIST: REGISTERED PROGRAM COURSE ALIGNMENT (continued) Health Insurance and Health Care Cost Management (individual) Topic MCC Course Outline Unit A. Hospital, surgical, and physicians' Unit IV: Understand the expense insurance characteristics, purpose, and use B. Major medical insurance and of health insurance. calculation of benefits C. Continuance and portability D. Medicare E. Taxation of premiums and benefits Disability Income Insurance (individual) Topic MCC Course Outline Unit A. Definitions of disability Unit III: Understand the B. Benefit period characteristics, purpose, and use C. Elimination period of disability income insurance. D. Benefit amount E. Provisions F. Taxation of premiums and benefits Long-term Care Insurance (individual) Topic MCC Course Outline Unit A. Eligibility Unit V: Understand the B. Services covered characteristics, purpose, and use C. Medicare limitations of long-term care insurance. D. Benefit period E. Elimination period F. Benefit amount G. Provisions H. Taxation of premiums and benefits Life Insurance (individual) Topic MCC Course Outline Unit A. Concepts and personal uses UNIT II: Understand the B. Policy types characteristics, purpose, and use C. Contractual provisions of individual life insurance and D. Dividend options annuities. E. Nonforfeiture options F. Settlement options G. Illustrations H. Policy replacement I. Viatical and life settlements 9
  10. 10. CFP BOARD’S FINANCIAL PLANNING TOPIC LIST: REGISTERED PROGRAM COURSE ALIGNMENT (continued) Income Taxation of Life Insurance Topic MCC Course Outline Unit A. Dividends UNIT II: Understand the B. Withdrawals and loans characteristics, purpose, and use C. Death benefits of individual life insurance and D. Modified endowment contracts (MECs) annuities. E. Transfer-for-value F. §1035 exchanges Business Uses of Insurance Topic MCC Course Outline Unit A. Buy-sell agreements Unit VII. Understand the B. Key employee life insurance characteristics, purpose, and use C. Split-dollar life insurance of property and liability D. Business overhead expense insurance insurance for the business, and evaluate the business uses of insurance. Insurance Needs Analysis Topic MCC Course Outline Unit A. Life insurance UNIT II: Understand the B. Disability income insurance characteristics, purpose, and use C. Long-term care insurance of individual life insurance and D. Health insurance annuities. E. Property insurance F. Liability insurance UNIT III: Understand the characteristics, purpose, and use of disability income insurance. UNIT IV: Understand the characteristics, purpose, and use of health insurance. UNIT V: Understand the characteristics, purpose, and use of long-term care insurance. UNIT VI: Understand the characteristics, purpose, and use of property, casualty, and liability insurance for the individual. 10
  11. 11. CFP BOARD’S FINANCIAL PLANNING TOPIC LIST: REGISTERED PROGRAM COURSE ALIGNMENT (continued) Insurance Policy and Company Selection Topic MCC Course Outline Unit A. Purpose of coverage UNIT VIII: Identify tools and B. Duration of coverage techniques utilized when selecting C. Participating or non-participating insurance policies and companies. D. Cost-benefit analysis E. Company selection a. Industry ratings b. Underwriting Annuities Topic MCC Course Outline Unit A. Types UNIT II: Understand the B. Uses characteristics, purpose, and use C. Taxation of individual life insurance and annuities. 11

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