COCHRANE WEALTH MANAGEMENT---------------------------------------------------------------       Honest Ideas – Successful ...
LEARNING ABOUTINSURANCE AND RISK   MANAGEMENT          Richard Foy  Certified Financial Planner
CHANGING NEED FOR LIFE INSURANCE
RISK MANAGEMENT - Are you covered?
MANAGING RISK FOR BUSINESS     Attracting and retaining employees     Ownership, conflict or change     Loss of key per...
FINANCIAL PAIN RELIEFPURPOSE:        Creation of estate                Protection of estateTYPE:           Term insuran...
GENERAL USES OF LIFE INSURANCE   Create an estate   Pay taxes at death   Income replacement   Capital loss due to deat...
FOR BUSINESS OWNERS Life insurance creates immediate liquidity for  business continuation Replace a key employee Restru...
THE INSURANCE WORLD   What if you die too soon…?   What if you live too long…?   What if your health fails…?What if you ca...
THE INSURANCE WORLD       Too much insurance…      Not enough insurance…Paying too much for your insurance…  Not the right...
INSURANCE MANAGEMENT STRATEGIES         I am bullet proof            Self insure         Share the burden
“WILL I RECEIVE BENEFITS?”       At time of claim??     At time of Application??
TERMINSURANCE
TERM INSURANCE Term insurance is designed to last a specified  amount of time such as one year, five years,  ten years or...
TERM INSURANCE Term 10 and 20 Renewable until age 85 Joint protection Preferred rates based on lifestyle and medical h...
TERM INSURANCE IS USED FOR… Insure mortgage and other personal loans Provide for children’s education Preserve your est...
FOR EXAMPLE…*                    TERM 10           TERM 20                    $500,000          $500,0001 – 10 years      ...
Private Mortgage Protectionvs. Bank Mortgage Protection       Refer to handout
WHOLE   LIFEINSURANCE
WHOLE LIFE INSURANCE A traditional policy with level premium payments  designed to remain in force over the lifetime of t...
WHOLE LIFE INSURANCE Offers permanent coverage with guarantees  on premiums and values Way to pay for taxes when an inhe...
WHOLE LIFETypes of Coverage:  Whole life 100  Whole life limited pay, age 65, age   75, 20 years, 25 years, 30 years
COVERAGE AVAILABLE    Single    Joint last to die    Joint first to die
OTHER FEATURES Cash surrender value: The cash surrender value begins  around the 10th policy anniversary year and builds ...
……and more features Guaranteed insurability benefit Medical underwriting can become an issue
FOR EXAMPLE…*                TERM 10    TERM 20    WHOLE LIFE        WHOLE LIFE                $500,000   $500,000    $500...
LIFE PROFILES Refer to handout
UNIVERSAL LIFE  INSURANCE
UNIVERSAL LIFE INSURANCE Flexible premium Adjustable benefit policy Blends term insurance and a savings account  earnin...
Universal Life Insurance Minimum funding Maximum funding Maximum tax actuarial reserve (MTAR)
UNIVERSAL LIFE  Refer to handout
LIFE INSURANCE INVEST                     UNIVERSALPREPAY                      WHOLE LIFELOW COST                    TERM ...
COMMON QUOTES……..   “Insurance is a waste of money          if we never use it”“Insurance is the best thing we’ve ever    ...
INSURANCE    Is not about ourselves…………    It is about:        our survivors        our caregiversDon’t forget to ask yo...
HOW MUCH LIFE INSURANCE DO          “THEY” NEED??$100,000 @ 6%         $6,000/year                      $500/month$200,000...
DISABILITY  INCOMEPROTECTION
DISABILITY INCOME PROTECTION      Self-employed      Trade professions      Medical professions      Business owners  ...
DISABILITY INCOME PROTECTION        Guaranteed Premiums        Renewable Premiums
DISABILITY INCOME PROTECTION          Any occupation         Regular occupation          Own occupation
HOW WILL YOU PAY FOR YOUR DISABILITY?          Spouse’s income          Government programs          Emergency savings ...
CRITICAL  ILLNESSINSURANCE
CRITICAL ILLNESS INSURANCE Provides a lump sum cash benefit if a medical  condition is diagnosed Assists with needs such...
CRITICAL ILLNESS INSURANCE It’s about peace of mind It’s about recovery Getting better costs money Treating and coping...
CRITICAL ILLNESS INSURANCE The money is yours to use any way you want Find the best health care available – anywhere Hi...
CRITICAL ILLNESS INSURANCE Coverage available from $25,000 to $2 million Policy is available with level premiums, renewa...
CRITICAL ILLNESS INSURANCE Getting your money back If you don’t ever need a critical illness payout, there  are return o...
WHO NEEDS CRITICAL ILLNESS INSURANCE??              Everyone…            A single woman…            A single parent…
CRITICAL ILLNESS INSURANCE        Refer to handout
LONG TERM CARE  INSURANCE
LONG TERM CARE INSURANCEProvides benefits to cover the costs of long    term care either home based or in a            nur...
LONG TERM CARE INSURANCELong Term Care Insurance is a horribly namedproduct and should be called:  “Bathing and toileting ...
LONG TERM CARE INSURANCERetirees and pre-retirees who are concerned about:   Maintaining the qualify of life   Protectin...
LONG TERM CARE INSURANCE   When the insured person is functionallydependent, cannot do two or more activities of daily liv...
CHANGING NEED FOR LIFE INSURANCE
BUILD A TEAM OF TRUSTED CONSULTANTS                        FINANCIAL                         ADVISOR                      ...
8 KEYS TO BUILDING WEALTH What does wealth mean to you? Identify key issues that need your attention Research solutions...
REMEMBER YOUR FINANCIAL       CHECKUP
BE HONEST WITH YOURSELFProcrastination is painless……             until hindsight kicks in
THANK YOU!
QUESTIONS?
The opinions expressed at the seminar will be those of Richard Foy and notnecessarily those of Raymond James Ltd. Statisti...
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Insurance 101 risk mgmt workshop march 4

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  • Foy Callaway # 3
  • 1-High income earners may be limited in he amount of disability benefits available to them 2-Commission income is often not covered under employer sponsored group LTD programs
  • Insurance 101 risk mgmt workshop march 4

    1. 1. COCHRANE WEALTH MANAGEMENT--------------------------------------------------------------- Honest Ideas – Successful Solutions
    2. 2. LEARNING ABOUTINSURANCE AND RISK MANAGEMENT Richard Foy Certified Financial Planner
    3. 3. CHANGING NEED FOR LIFE INSURANCE
    4. 4. RISK MANAGEMENT - Are you covered?
    5. 5. MANAGING RISK FOR BUSINESS  Attracting and retaining employees  Ownership, conflict or change  Loss of key person  Economic risks  Consumer spending  Supplier risks  Protecting intellectual property  Credit risks  Operational risks  Catastrophic risks
    6. 6. FINANCIAL PAIN RELIEFPURPOSE:  Creation of estate  Protection of estateTYPE:  Term insurance  Permanent insuranceREASON:  Love  Fear
    7. 7. GENERAL USES OF LIFE INSURANCE  Create an estate  Pay taxes at death  Income replacement  Capital loss due to death  Fairness at inheritance time  Provide for retirement funds  Excellent for business transfers  Gifts to charities  Payoff mortgages, guarantees, loans
    8. 8. FOR BUSINESS OWNERS Life insurance creates immediate liquidity for business continuation Replace a key employee Restructure financing arrangements Repay creditors Facilitate business succession to buy partners shares upon death
    9. 9. THE INSURANCE WORLD What if you die too soon…? What if you live too long…? What if your health fails…?What if you cannot earn a living…?
    10. 10. THE INSURANCE WORLD Too much insurance… Not enough insurance…Paying too much for your insurance… Not the right kind of insurance…
    11. 11. INSURANCE MANAGEMENT STRATEGIES I am bullet proof Self insure Share the burden
    12. 12. “WILL I RECEIVE BENEFITS?” At time of claim?? At time of Application??
    13. 13. TERMINSURANCE
    14. 14. TERM INSURANCE Term insurance is designed to last a specified amount of time such as one year, five years, ten years or up to a certain age At the end of this time, the policy expires Temporary Ideal for young families Low cost
    15. 15. TERM INSURANCE Term 10 and 20 Renewable until age 85 Joint protection Preferred rates based on lifestyle and medical history Guaranteed premiums for future renewals Option to convert into permanent insurance until age 65
    16. 16. TERM INSURANCE IS USED FOR… Insure mortgage and other personal loans Provide for children’s education Preserve your estate Cover costs of final wishes and inheritance Share buy back for deceased shareholder Hire a replacement or offset losses resulting from the death of a key employee
    17. 17. FOR EXAMPLE…* TERM 10 TERM 20 $500,000 $500,0001 – 10 years $464 $77811 – 20 years $2,770 $77821 – 30 years $6,637 $9,58031 – 40 years $18,981 $9,580 *Annual Premiums based on: 40 year old male, non-smoker
    18. 18. Private Mortgage Protectionvs. Bank Mortgage Protection Refer to handout
    19. 19. WHOLE LIFEINSURANCE
    20. 20. WHOLE LIFE INSURANCE A traditional policy with level premium payments designed to remain in force over the lifetime of the insured Early premiums tend to be higher than required This builds a base reserve along with accumulated interest which enables the premium to remain level in later years
    21. 21. WHOLE LIFE INSURANCE Offers permanent coverage with guarantees on premiums and values Way to pay for taxes when an inheritance is transferred
    22. 22. WHOLE LIFETypes of Coverage: Whole life 100 Whole life limited pay, age 65, age 75, 20 years, 25 years, 30 years
    23. 23. COVERAGE AVAILABLE  Single  Joint last to die  Joint first to die
    24. 24. OTHER FEATURES Cash surrender value: The cash surrender value begins around the 10th policy anniversary year and builds the longer the policy is in effect Automatic premium loan is only available if there is cash surrender value, interest will be charged on the amount of the loan Reduced paid up option entitles the client to stop paying the insurance premiums provided there is a cash value to do so Once this option is elected, the client cannot pay back the premium and have the sum insured increased to the original amount
    25. 25. ……and more features Guaranteed insurability benefit Medical underwriting can become an issue
    26. 26. FOR EXAMPLE…* TERM 10 TERM 20 WHOLE LIFE WHOLE LIFE $500,000 $500,000 $500,000 $100,0001 – 10 years $464 $778 $5,897 $1,25011 – 20 years $2,770 $778 $5,897 $1,25021 – 30 years $6,637 $9,580 Paid Up Paid Up31 – 40 years $18,981 $9,580 Paid Up Paid Up *Annual Premiums based on: 40 year old male, non-smoker
    27. 27. LIFE PROFILES Refer to handout
    28. 28. UNIVERSAL LIFE INSURANCE
    29. 29. UNIVERSAL LIFE INSURANCE Flexible premium Adjustable benefit policy Blends term insurance and a savings account earning current interest rates Unlike whole life, premiums can be adjusted provided the policy value is adequate to maintain the cost of insurance
    30. 30. Universal Life Insurance Minimum funding Maximum funding Maximum tax actuarial reserve (MTAR)
    31. 31. UNIVERSAL LIFE Refer to handout
    32. 32. LIFE INSURANCE INVEST UNIVERSALPREPAY WHOLE LIFELOW COST TERM LIFE
    33. 33. COMMON QUOTES…….. “Insurance is a waste of money if we never use it”“Insurance is the best thing we’ve ever done when we need it”
    34. 34. INSURANCE Is not about ourselves………… It is about: our survivors our caregiversDon’t forget to ask your survivors or caregivers what they think!
    35. 35. HOW MUCH LIFE INSURANCE DO “THEY” NEED??$100,000 @ 6% $6,000/year $500/month$200,000 @ 6% $12,000/year $1,000/month$500,000 @ 6% $30,000/year $2,500/month$1,000,000 @ 6% $60,000/year $5,000/month
    36. 36. DISABILITY INCOMEPROTECTION
    37. 37. DISABILITY INCOME PROTECTION  Self-employed  Trade professions  Medical professions  Business owners  Corporate employees
    38. 38. DISABILITY INCOME PROTECTION Guaranteed Premiums Renewable Premiums
    39. 39. DISABILITY INCOME PROTECTION Any occupation Regular occupation Own occupation
    40. 40. HOW WILL YOU PAY FOR YOUR DISABILITY?  Spouse’s income  Government programs  Emergency savings  Investments  RRSP withdrawals  Loan  Friends and family  Downsize your lifestyle
    41. 41. CRITICAL ILLNESSINSURANCE
    42. 42. CRITICAL ILLNESS INSURANCE Provides a lump sum cash benefit if a medical condition is diagnosed Assists with needs such as mortgage and debt protection, supplementing gaps in other insurance protection, asset preservation
    43. 43. CRITICAL ILLNESS INSURANCE It’s about peace of mind It’s about recovery Getting better costs money Treating and coping with illness can mean significant and often unexpected costs
    44. 44. CRITICAL ILLNESS INSURANCE The money is yours to use any way you want Find the best health care available – anywhere Hire a nurse or caregiver to help you at home Make mortgage payments Replace lost income
    45. 45. CRITICAL ILLNESS INSURANCE Coverage available from $25,000 to $2 million Policy is available with level premiums, renewable premiums payable to age 100 or limited pay Lots of bells and whistles …
    46. 46. CRITICAL ILLNESS INSURANCE Getting your money back If you don’t ever need a critical illness payout, there are return of premium riders available at an additional charge
    47. 47. WHO NEEDS CRITICAL ILLNESS INSURANCE?? Everyone… A single woman… A single parent…
    48. 48. CRITICAL ILLNESS INSURANCE Refer to handout
    49. 49. LONG TERM CARE INSURANCE
    50. 50. LONG TERM CARE INSURANCEProvides benefits to cover the costs of long term care either home based or in a nursing care facility
    51. 51. LONG TERM CARE INSURANCELong Term Care Insurance is a horribly namedproduct and should be called: “Bathing and toileting insurance so your kids won’t have to do it for you!”
    52. 52. LONG TERM CARE INSURANCERetirees and pre-retirees who are concerned about:  Maintaining the qualify of life  Protecting retirement savings  Estate preservation
    53. 53. LONG TERM CARE INSURANCE When the insured person is functionallydependent, cannot do two or more activities of daily living, which includes bathing, eating, dressing, toileting, maintaining continence or cognitive impairment
    54. 54. CHANGING NEED FOR LIFE INSURANCE
    55. 55. BUILD A TEAM OF TRUSTED CONSULTANTS FINANCIAL ADVISOR BIG PICTURE LIFE PLAN INSURANCE BANKER AGENT LOANS / MORTGAGES SAVINGS / CHEQUING CAR INSURANCE HOME INSURANCE ACCOUNTANT LAWYER TAXES REAL ESTATE BOOKKEEPING WILL & PROBATE
    56. 56. 8 KEYS TO BUILDING WEALTH What does wealth mean to you? Identify key issues that need your attention Research solutions that will work Am I adequately protected? Who should be on the “trusted advisor” team? Schedule my next financial checkup Don’t procrastinate HAVE FUN!!!
    57. 57. REMEMBER YOUR FINANCIAL CHECKUP
    58. 58. BE HONEST WITH YOURSELFProcrastination is painless…… until hindsight kicks in
    59. 59. THANK YOU!
    60. 60. QUESTIONS?
    61. 61. The opinions expressed at the seminar will be those of Richard Foy and notnecessarily those of Raymond James Ltd. Statistics and factual data and otherinformation presented at the seminar are from sources RJL believes to be reliablebut their accuracy cannot be guaranteed. It is furnished on the basis andunderstanding that Raymond James is to be under no liability whatsoever in respectthereof. It is for information purposes only and is not to be construed as an offer orsolicitation for the sale or purchase of securities. Securities are offered throughRaymond James Ltd., member CIPF. Financial planning and insurance are offeredthrough Raymond James Financial Planning Ltd., which is not a member CIPF.

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