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Life Insurance Basics 04-05-final final

This document provides information about a webinar on life insurance basics for military families. The webinar will be presented by Dr. Barbara O'Neill, a financial educator, and Ruth Berkheimer from the VA Insurance Service. It will cover basic insurance principles, life insurance needs analysis, life insurance needs of military families, and SGLI life insurance for service members. The webinar will also take questions from participants.

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https://learn.extension.org/events/2496 This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Readiness Policy, U.S. Department of Defense under Award Numbers 2014-48770-22587 and 2015-48770-24368. Life Insurance Basics for Military Families 1
Connecting military family service providers to research and to each other through innovative online programming www.extension.org/militaryfamilies MFLN Intro Sign up for webinar email notifications at www.extension.org/628312
Connecting military family service providers to research and to each other through innovative online programming MFLN Intro Join the Conversation Online! 3
Join the Conversation Online! MFLN Personal Finance MFLN Personal Finance @MFLNPF MFLN Group https://www.linkedin.com/groups/8409844 PF SMS iconsPF SMS icons Military Families Learning Network 4
Dr. Barbara O’Neill •Financial Resource Management Specialist for Rutgers Cooperative Extension •Has been a professional, financial educator and author for more than 35 years. •Has written more than 1,500 articles for academic journals, conference proceedings & other professional publications. Today’s Presenters Ruth Berkheimer •Insurance Specialist on the VA Insurance Service Program Administration and Oversight Staff. •Ruth has been actively involved with the implementation of numerous program changes and enhancements, including the Family Servicemembers’ Group Life Insurance Program and the Servicemembers’ Group Life Insurance Traumatic Injury Protection Program. 5
Workshop Topics • Basic insurance principles and terminology • Life insurance characteristics • Life insurance needs analysis process • Life insurance needs of military families • SGLI life insurance for service members 6
Question #1: What life insurance errors do you frequently see with your clients or students? 7
Life is Full of Risks…Many Have Financial Consequences • Damage to car in an accident • Loss of home and/or possessions • Loss of income due to disability • Loss of a household earner’s income • Loss of a homemaker’s services • Large medical bills for disease or injury • A court judgment of liability for damages 8
Five Ways to Manage Life’s Financial Risks • Do nothing and hope for the best • Risk avoidance • Risk reduction • Risk acceptance • Risk transfer (insurance) 9
Risk Avoidance Risk Shifting Risk Assumption Risk ReductionWays to Manage Risk Don’t stop at a convenience store in a bad part of town after midnight Wear seatbelts Install an alarm system Buy Insurance Self Insurance Source: Kapoor, Dlabay, Hughes, & Hart (2016). Focus on Personal Finance 10
Common Financial Risks • Personal Risks – Loss of income or life – Illness and disability • Property Risks – Losses to property – Caused by perils such as fire or theft • Liability Risks – Losses caused by negligence – Resulting in injury or property damage to others 11
How Insurance Works Insurance Policy – Contract between a person buying insurance (the insured) and an insurance company (the insurer) 12
The Essence of Insurance • Insurance consists of two basic elements: – Reduction of risk – Sharing of losses • Law of Large Numbers – As the number of members in a group increases, predictions about the group’s behavior become increasingly more accurate 13
An Insurable Interest Must Exist to Buy Insurance Insurable Interest – When a person or organization stands to suffer a financial loss from a specific risk – Example #1: The person who lives in an house that is insured – Example #2: The spouse of person who is covered by life insurance 14
Insurance Basics • Protect against risk by paying a premium • “Large Loss Principle” (size of loss matters) • Major “large-loss” risks: – Loss of income due to disability – Loss of a household earner’s income – Destruction of one’s home (fire, flood, etc.) – Liability losses due to a court judgment – Large medical expenses (e.g., cancer treatment) 15
Loss Severity and Loss Frequency Source: Garman & Forgue (2008). Personal Finance 16
Common Insurance Errors • Not following the “large loss principle” • Unfamiliarity with employer-provided (and public) insurance benefits • Lack of disability insurance • Lack of adequate liability insurance • Not checking credit rating of insurance companies 17
Parts of an Insurance Contract • Declarations page • Insuring Agreements • Exclusions • Endorsements and Riders 18
Policy Features that Limit Insurance Coverage • Benefit coordination clauses • Deductible • Elimination period • Co-payment • Co-insurance • Policy limit 19
Generally Unnecessary Insurance Policies • Credit insurance for individually purchased items (e.g., life, disability, unemployment) • Cancer insurance • “Double Indemnity” insurance riders • Hospital indemnity policies • Flight insurance • Car rental collision-damage waivers 20
Question #2: Do YOU have a life insurance policy? Why or why not? 21
Question #3: Does a young unmarried adult without children need life insurance? Why or why not? 22
Question #4: Do minor children need life insurance? Why or why not? 23
Why Do People Need Life Insurance? • Income-Replacement Needs – Financial losses resulting from premature death: lost income and employee benefits • Major Expenses – Two examples are a mortgage and children’s college expenses • Final Expenses – One-time medical and funeral expenses occurring just prior to or after a death • Readjustment-Period Needs – Allows surviving spouse/family members to pay ongoing expenses 24
Powerful Life Insurance Video: A Legacy of Love https://www.youtube.com/watch?v=ZKHftmG WoEM 25
Financial Planning With Life Insurance Primary Purposes of Life Insurance: •Protect someone who depends on you (or owes money on your behalf) from financial losses related to your death •Reduce financial burdens of survivors •Insurance company promises to pay a lump sum (death benefit) to a named beneficiary at the time of the policy holder’s death •Some policies pay benefits while a policyholder is still alive 26
Other Reasons Why People Buy Life Insurance • Pay off a mortgage or debts • Lump-sum endowments for children • Make charitable donations • Accumulate savings • Establish a regular income for survivors • Set up an estate plan (e.g., fund trusts with life insurance benefits) • Pay estate and gift taxes (e.g., business owners) 27
How Life Insurance Works • Life insurance is obtained by purchasing a policy 28
More About Life Insurance • Mortality Tables- Provide odds of people dying, based on age and gender • Premium is based on life expectancy and projections for payouts for persons who die (called actuarial tables) – Older people pay more because they will die sooner • Face Amount- Dollar value of protection listed in the policy and amount used to calculate the premium (e.g., $100,000) • Group Term Insurance- Issued to people as members of a group rather than as individuals 29
• Multiple of Salary Method – A multiple (7x, 10x) of a deceased person’s salary • The DINK Method – Dual income, no kids, similar incomes – Assumes spouse’s earnings will continue – Cover funeral + ½ of mortgage and other debts • The “Family Need” Method – More thorough than the first two methods – Considers employer-provided insurance, family goals, Social Security benefits, spouse’s income and assets Estimating Life Insurance Need 30
Question #5: What resources do YOU use to help clients calculate their life insurance need? 31
Life Insurance Calculators 32
Life Insurance Worksheet #1 http://njaes.rutgers.edu/money/pdfs/session-ii.pdf 33
Life Insurance Worksheet #2 34
Online Life Insurance Calculators • Morgan Stanley: https://sw- landings.s3.amazonaws.com/zzzzmqh-media.pdf • Life Happens: http://www.lifehappens.org/insurance- overview/life-insurance/calculate-your-needs/ • State Farm: https://www.statefarm.com/insurance/life/resources/life-needs- calculator • Bankrate.com: http://www.bankrate.com/calculators/insurance/life-insurance- calculator.aspx 35
Question #6: Do you recommend Term life insurance? Whole life insurance? Or both? 36
Term Life Insurance Term Life – Protection for a specified period of time – Like “renting insurance” – Ends at the end of term (or if you stop paying premiums) Renewable Term- Can renew; higher premium charged Multiyear Level Term- Same premium for a long set period Conversion Term- Allows change to permanent policy Decreasing Term- Face value decreases over time 37
• Often provided as employee benefit (e.g., 1.5 x salary) • Least expensive type of life insurance coverage • No cash value • Gets more expensive with age • May not be able to renew after 65 or with health “issues” More About Term Life Insurance 38
• Combines coverage and investment (cash value) • Can borrow against the cash value • Major types: whole life, universal life, variable life • Usually need to hold a long time for cash value to become a large dollar amount Permanent Life Insurance 39
Cash-Value Life Insurance Source: Garman & Forgue (2008). Personal Finance 40
Permanent Life Insurance Details • Straight-Life or Whole-Life Insurance – Pay the premium as long as you live – Premium depends on age when you start the policy – Accumulates a cash value you can borrow against – Look carefully at the rate of return your money earns • Limited Payment Policy – You pay premiums for a stipulated period – Policy is then “paid up” and you remain insured for life • Variable Life - Fixed premiums; investment subaccounts • Universal Life- Can change premium, time period, benefit 41
Buy Term Life Insurance and Invest the Difference? Source: Garman and Forgue (2008). Personal Finance 42
Key Provisions in a Life Insurance Policy • Beneficiary and contingent beneficiaries (those who will receive benefits upon the insured’s death) • Incontestability clause  after policy has been in force for a specified period, company can’t dispute its validity for any reason (usually 2 years) • Length of grace period for late payments • Reinstatement rules for a lapsed policy • Non-forfeiture clause allows you to keep accrued benefits in a whole life policy if you drop the policy • Misstatement of age provision (benefits paid on real age) • Policy loan provision to borrow against cash value • Suicide clause during first two years (only get back premiums) • Policy rider modifies coverage by adding or altering benefits 43
Life Insurance Settlement Options Settlement Options: Choices of how an insurance benefit is paid out – Lump-Sum Payment • Most common method – Limited Installment Plan • Equal installments for a specific number of years after death (10-year certain) – Life Income Option • Payments to the beneficiary for life – Proceeds Left with the Company • Pays interest to the beneficiary 44
Buying Life Insurance: Factors to Consider • Present and future sources of income for dependents – Other savings and income protection – Group life insurance – Pension benefits – Social Security benefits • Financial strength of the insurance company 45
Buying Life Insurance: Gathering Data Determine from whom to buy your policy – Research the company’s rating by major rating companies: • A. M. Best • Standard and Poor’s • Duff & Phelps • Moody’s • Weiss Research – Talk to family, friends, colleagues, advisors – Online premium quote services The image part with relationship ID rId1 was not found in the file. 46
Male, born 1/1/1980; 190 lb; Living in New York State $400,000 term insurance – 10 years Preferred (best health); never smoked; $55+ per quarter ($220/yr) Standard, current smoker $155+ per quarter ($620/yr) Sample Life Insurance Estimate Source: www.directquote.com 47
Types of Life Insurance Companies and Policies 2 Types of Life Insurance Companies Type of Company Owned by Stock life Insurance Shareholders Mutual life insurance Policyholders Source: Kapoor, Dlabay, Hughes, & Hart (2016). Focus on Personal Finance
Mutual Life Insurance Companies • Owned by policyholders • Participating policy premiums are higher than non- participating policies • Part of the participating premium is refunded to policyholders annually in the form of a dividend • Examples: Mutual Benefit Life Insurance, Liberty Mutual, Massachusetts Mutual Life Insurance 49
Should You Ever Switch Policies? It Depends! • Switch if benefits exceed costs of getting another physical and paying policy set-up costs • The older you are, the higher the premium • Are you still insurable? • Can you get all the provisions you want? • Don’t cancel an old policy until new policy is in hand 50
Choosing an Insurance Agent • Ask friends, family, colleagues, and neighbors for recommendations. • Does an agent belong to professional organizations? • Is the agent a Chartered Life Underwriter (CLU)? • Is the agent willing to take the time to answer questions and find a policy that is right for you? • Do you feel pressured? • Is the agent available when needed?
Insurance is Regulated at the State Government Level 52
Life Insurance Video: What is Life Insurance? https://www.youtube.com/watch?v=cazn9l4CEvk 53
VETERANS BENEFITS ADMINISTRATION Ruth Berkheimer, Insurance Specialist, VA Insurance Center VA Life Insurance Programs MFLN Webinar April 5, 2016
VETERANS BENEFITS ADMINISTRATION Customer Base – 6.3 million Insured • 2.3 Million Servicemembers • 2.8 Million Spouses/Children • 429,000 Post-1992 Veterans The image part with relationship ID rId1 was not found in the file. • 475,000 WWII, & Korean Era Veterans • 272,000 Disabled Veterans Source: Feb. 29, 2016 Exhibit of Insurance Inforce 55
VETERANS BENEFITS ADMINISTRATION Face Amount of Coverage: VA vs. Private Industry Met Life $4.4 Trillion Prudential $3.8 Trillion VA $1.3 Trillion 11th largest insurer Northwestern Mutual $1.5 Trillion Aegon USA $1.5 Trillion Scor Life $1.7 Trillion RGA Group $1.9 Trillion AIG Life & Retirement $1.5 Trillion Lincoln Financial $1.3 Trillion Voya Financial $1.4 Trillion Source: Best's Review September 2015 Swiss Life $1.3 Trillion 56
VETERANS BENEFITS ADMINISTRATION VA-Supervised Life Insurance Programs 57
VETERANS BENEFITS ADMINISTRATION Supervised Programs • Servicemembers’ Group Life Insurance • SGLI Family Coverage • SGLI Traumatic Injury Protection • SGLI Disability Extension • Veterans’ Group Life Insurance 58
VETERANS BENEFITS ADMINISTRATION Servicemembers’ Group Life Insurance (SGLI) • Active duty, Reservists and Guard automatically insured for $400,000 • Member has option to decline or reduce the coverage in increments of $50,000 • Coverage is 24/7, no restrictions • $28 monthly premium, plus $1 for traumatic injury coverage, deducted from pay • Coverage continues for 120 days after discharge at no cost to member • Member can apply for an extension of SGLI for up to 2 years if: – Disabilities prevent member from being gainfully employed, or – Member has certain statutory disabilities Pages 30-34 of VA Life Insurance Handbook 59
VETERANS BENEFITS ADMINISTRATION Servicemembers’ Group Life Insurance (SGLI) Active Duty Ready Reserve Participation Policy Year 2015 93%99% 60
VETERANS BENEFITS ADMINISTRATION SGLI Family Coverage (FSGLI) • Spouse Coverage – Automatic coverage for non-military spouses (spouse must be registered in DEERS) – Spouses who are also in the military must apply – $100,000 maximum or amount of member’s coverage, whichever is less – Age-based premiums • Child coverage – Automatic for all members covered by SGLI; member does not have to have spouse coverage to have child coverage – No charge to Servicemembers – Benefit for Stillbirth – Effective 10/10/2008 • Servicemember is always beneficiary Pages 38-41 of VA Life Insurance Handbook 61
VETERANS BENEFITS ADMINISTRATION SGLI Family Coverage (FSGLI) FSGLI spouse coverage terminates 120 days after any of the following: – Member separates from the military – Divorce – Member elects in writing to terminate spouse SGLI coverage – Member elects in writing to terminate his/her SGLI coverage – Death of member FSGLI child coverage terminates 120 days after any of the following: – Member separates from the military – Member elects in writing to terminate his/her SGLI coverage – Death of member – Child no longer qualifies as an insurable dependent Conversion option – Spouse coverage can be converted to an individual policy within 120 days of above events – Dependent child coverage cannot be converted 62
VETERANS BENEFITS ADMINISTRATION FSGLI – National Defense Authorization Act 2013 NDAA 2013 repealed automatic enrollment in FSGLI for members who are married to other members effective January 2, 2013 • If marriage occurred before 1/2/2013 : – Spouse coverage is automatically issued to both spouses – Coverage is effective on the date of the marriage – Premium is owed from the date of marriage • If marriage occurred on or after 1/2/2013: – Coverage is not automatically issued – If spouse coverage is desired, an application for spouse coverage must be submitted (SGLV 8286A) – Coverage is effective on the date of application, if application is approved – Premium is due from the date of application if coverage is issued 63
VETERANS BENEFITS ADMINISTRATION SGLI Traumatic Injury Protection (TSGLI) • Effective Dec. 1, 2005; retroactive to Oct. 7, 2001 regardless of geographic location where injuries occurred • Provides financial benefit to those suffering serious traumatic injuries to help with expenses during treatment and recovery • Automatic for members who have SGLI (retroactive regardless of SGLI coverage) • Premium is $1/month • Must suffer qualifying loss due to a traumatic injury to receive payment • Benefit from $25K to $100K, depending on type of loss or length of recovery period • Branch of Service TSGLI Offices evaluate and certify claims for their members • Not just a combat benefit Pages 35-37 of VA Life Insurance Handbook 64
VETERANS BENEFITS ADMINISTRATION SGLI Traumatic Injury Protection (TSGLI) • Benefit ranges from $25K - $100K • Examples of losses covered:  Loss of limbs  Loss of vision, hearing, speech  Plegias  Burns  15-day hospitalization • Types of losses not covered:  Mental illness such as PTSD  Physical illness or disease 65
VETERANS BENEFITS ADMINISTRATION TSGLI - Criteria for Payment • Suffer a qualifying loss as the result of a traumatic event while in service • Covered by SGLI when traumatic event occurs (except for retroactive period) • Traumatic event must occur prior to separation from service (loss can occur after separation) • Loss is a direct result of the traumatic event • Loss occurs within 2 years (730 days) of traumatic event • Survive 7 days from date of traumatic event 66
VETERANS BENEFITS ADMINISTRATION SGLI Disability Extension • For separating Servicemembers who: – are unable to work due to their disabilities, or – have certain statutory conditions • Extends SGLI coverage free of charge for up to two years from separation or until able to maintain gainful employment • Member must apply • If approved for SGLI Disability Extension, automatically converted to VGLI at end of two years (VGLI premiums not waived) • We call recently separated disabled Veterans to advise them of the full range of VA Life Insurance benefits Page 32 of VA Life Insurance Handbook 67
VETERANS BENEFITS ADMINISTRATION Veterans’ Group Life Insurance (VGLI) • Initial Maximum Coverage = Amount of SGLI at separation • Member must apply unless on the SGLI Disability Extension • 1 year and 120 days from separation to apply; if within 240 days of separation, no proof of health required • Age-based premiums • Can increase coverage by $25,000 on five-year anniversary date up to $400,000 maximum • Great transition insurance; Separating Servicemembers should be encouraged to apply until they obtain other coverage • Renewable for life, or convert The image part with relationship ID rId1 was not found in the file. Pages 42-48 of VA Life Insurance Handbook 68
VETERANS BENEFITS ADMINISTRATION Beneficiary Financial Counseling Service (BFCS) • No cost financial planning services available to beneficiaries of SGLI, FSGLI, TSGLI and VGLI ₋ Service provided by FinancialPoint® ₋ Objective financial professionals – do not receive commission • Beneficiaries can provide information online and a financial plan will be prepared for them. • Beneficiaries can request a face-to-face meeting with a financial professional. • Beneficiaries can call to get quick answers to financial questions or to request a detailed financial plan. 69
VETERANS BENEFITS ADMINISTRATION Online Will Preparation • Online will preparation services are available to beneficiaries at no cost to them. • Service enables beneficiaries to prepare a will online without an attorney. • Answer a series of questions and receive a legal will, valid in all 50 states, ready to print and sign. • Documents how assets will be distributed in the event of death. 70
VETERANS BENEFITS ADMINISTRATION Accelerated Benefit Option (ABO) • Member (or spouse for FSGLI) must be terminally ill with a prognosis of 9 months or less to live • Insured can receive up to 50% of the face amount of coverage • Reduces death benefit • Non-taxable 71
VETERANS BENEFITS ADMINISTRATION VA-Administered Life Insurance Programs 72
VETERANS BENEFITS ADMINISTRATION Service-Disabled Veterans’ Insurance • $10,000 maximum basic coverage • Must have received a service-connected disability rating from VA of at least 0% • Must apply within two years of a rating for a new service-connected disability • Must be in good health except for service-connected disabilities • Premiums can be waived if totally disabled • If approved for waiver of premiums, Veteran may purchase up to $30,000 of supplemental insurance (premiums cannot be waived on supplemental) The image part with relationship ID rId1 was not found in the file. Pages 23-26 of VA Life Insurance Handbook 73
VETERANS BENEFITS ADMINISTRATION Veterans’ Mortgage Life Insurance • Up to $200,000 of mortgage coverage • Must have received a specially-adapted housing grant from VA • Coverage reduces with mortgage balance • Payable only to the mortgage company • Cannot be issued after age 69 • Premiums based on Veteran’s or Servicemember’s age, mortgage balance, and length of mortgage Pages 27-29 of VA Life Insurance Handbook 74
VETERANS BENEFITS ADMINISTRATION Insurance Internet - Self-Service Veterans can perform many functions themselves, including:  Access Policy information  Borrow from Policies  Find and download Insurance related forms  Learn how to file a disability or death claim  Apply for Insurance on-line  Beneficiaries can learn how to get financial counseling  Learn how to convert from SGLI to VGLI  Change Address (VGLI insureds)  Pay premiums from credit card or checking account www.benefits.va.gov/insurance 75
VETERANS BENEFITS ADMINISTRATION VA Insurance Website www.benefits.va.gov/insurance
VETERANS BENEFITS ADMINISTRATION http://www.benefits.va.gov/INSURANCE/docs/2016_VALifeBook.pdf VA Life Insurance Handbook
VETERANS BENEFITS ADMINISTRATION On-Demand Training www.benefits.va.gov/insurance/training1.asp VA Insurance Website - Training
VETERANS BENEFITS ADMINISTRATION VA Insurance Website - Forms http://www.benefits.va.gov/INSURANCE/resources-forms.asp
VETERANS BENEFITS ADMINISTRATION Program Contact Information for SGLI, FSGLI, VGLI Claims Office of Servicemembers’ Group Life Insurance (OSGLI) – Address: 80 Livingston Avenue, Roseland, NJ 07068 – Telephone Numbers: • 800-419-1473, Monday through Friday, 8:00 am to 5:00 pm Eastern • Main Fax: (800) 236-6142 • Claims Fax: (877) 832-4943 – E-Mail: • Claims Only (Death & TSGLI): osgli.claims@prudential.com • TSGLI Appeals: tsgli.appeals.osgli@prudential.com • All Other: osgli.osgli@prudential.com 80
VETERANS BENEFITS ADMINISTRATION Branch of Service TSGLI Offices • Servicemembers should contact their Branch of Service TSGLI Office • Contact information for these offices can be found at: Program Contact Information for TSGLI www.benefits.va.gov/insurance/forms/ SGLV_8600_ed2014-06.pdf 81
VETERANS BENEFITS ADMINISTRATION Program Contact Information for S-DVI, VMLI VA Insurance Center – Address: VA Insurance Center, P.O.Box 7208, Phila., PA 19101 – Telephone Numbers: • 800-669-8477, Monday through Friday, 8:00 am to 6:00 pm Eastern • Main Fax: (888) 748-5822 • Claims Fax: (888) 748-5822 – E-Mail: • Go to https://insurance.va.gov/mypolicy/mypolicy.htm 82
VETERANS BENEFITS ADMINISTRATION Contact Information Ruth Berkheimer, Insurance Specialist VA Insurance Center, Philadelphia, PA Phone: 215-842-2000, ext. 4275 ruth.berkheimer@va.gov 83
VETERANS BENEFITS ADMINISTRATION Questions? 84
What is one significant thing you learned today? 85
Evaluation and Continuing Education Credits/Certificate of Completion MFLN Personal Finance is offering 1.5 credit hours via a certificate of completion for today’s webinar from AFCPE for AFC-credentialed participants and FinCert for CPFC- credentialed participants. To receive a certificate of completion, please complete the evaluation and post-test at:https://vte.co1.qualtrics.com/jfe/form/SV_3x8v39pgTpMA8 w5 Must pass post-test with 80% or higher to receive certificate. 86
Personal Finance Upcoming Event Credit Scores: What’s New? • Date: Tuesday, May 3, 2016 • Time: 11 a.m. Eastern • Location: https://learn.extension.org/events/2488 For more information on MFLN Personal Finance go to: https://blogs.extension.org/militaryfamilies/personal-finance/ 87
www.extension.org/62581 This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Readiness Policy, U.S. Department of Defense under Award Numbers 2014-48770-22587 and 2015-48770-24368. The image part with relationship ID rId1 was not found in the file.The image part with relationship ID rId1 was not found in the file. The image part with relationship ID rId1 was not found in the file. 88
Research and evidenced-based professional development through engaged online communities www.extension.org/militaryfamilies Sign up for webinar email notifications at www.extension.org/62831 89

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Life Insurance Basics 04-05-final final

  • 1.
    https://learn.extension.org/events/2496 This material isbased upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Readiness Policy, U.S. Department of Defense under Award Numbers 2014-48770-22587 and 2015-48770-24368. Life Insurance Basics for Military Families 1
  • 2.
    Connecting military familyservice providers to research and to each other through innovative online programming www.extension.org/militaryfamilies MFLN Intro Sign up for webinar email notifications at www.extension.org/628312
  • 3.
    Connecting military familyservice providers to research and to each other through innovative online programming MFLN Intro Join the Conversation Online! 3
  • 4.
    Join the ConversationOnline! MFLN Personal Finance MFLN Personal Finance @MFLNPF MFLN Group https://www.linkedin.com/groups/8409844 PF SMS iconsPF SMS icons Military Families Learning Network 4
  • 5.
    Dr. Barbara O’Neill •FinancialResource Management Specialist for Rutgers Cooperative Extension •Has been a professional, financial educator and author for more than 35 years. •Has written more than 1,500 articles for academic journals, conference proceedings & other professional publications. Today’s Presenters Ruth Berkheimer •Insurance Specialist on the VA Insurance Service Program Administration and Oversight Staff. •Ruth has been actively involved with the implementation of numerous program changes and enhancements, including the Family Servicemembers’ Group Life Insurance Program and the Servicemembers’ Group Life Insurance Traumatic Injury Protection Program. 5
  • 6.
    Workshop Topics • Basicinsurance principles and terminology • Life insurance characteristics • Life insurance needs analysis process • Life insurance needs of military families • SGLI life insurance for service members 6
  • 7.
    Question #1: What lifeinsurance errors do you frequently see with your clients or students? 7
  • 8.
    Life is Fullof Risks…Many Have Financial Consequences • Damage to car in an accident • Loss of home and/or possessions • Loss of income due to disability • Loss of a household earner’s income • Loss of a homemaker’s services • Large medical bills for disease or injury • A court judgment of liability for damages 8
  • 9.
    Five Ways toManage Life’s Financial Risks • Do nothing and hope for the best • Risk avoidance • Risk reduction • Risk acceptance • Risk transfer (insurance) 9
  • 10.
    Risk Avoidance Risk Shifting Risk Assumption Risk ReductionWays to Manage Risk Don’t stopat a convenience store in a bad part of town after midnight Wear seatbelts Install an alarm system Buy Insurance Self Insurance Source: Kapoor, Dlabay, Hughes, & Hart (2016). Focus on Personal Finance 10
  • 11.
    Common Financial Risks •Personal Risks – Loss of income or life – Illness and disability • Property Risks – Losses to property – Caused by perils such as fire or theft • Liability Risks – Losses caused by negligence – Resulting in injury or property damage to others 11
  • 12.
    How Insurance Works InsurancePolicy – Contract between a person buying insurance (the insured) and an insurance company (the insurer) 12
  • 13.
    The Essence ofInsurance • Insurance consists of two basic elements: – Reduction of risk – Sharing of losses • Law of Large Numbers – As the number of members in a group increases, predictions about the group’s behavior become increasingly more accurate 13
  • 14.
    An Insurable InterestMust Exist to Buy Insurance Insurable Interest – When a person or organization stands to suffer a financial loss from a specific risk – Example #1: The person who lives in an house that is insured – Example #2: The spouse of person who is covered by life insurance 14
  • 15.
    Insurance Basics • Protectagainst risk by paying a premium • “Large Loss Principle” (size of loss matters) • Major “large-loss” risks: – Loss of income due to disability – Loss of a household earner’s income – Destruction of one’s home (fire, flood, etc.) – Liability losses due to a court judgment – Large medical expenses (e.g., cancer treatment) 15
  • 16.
    Loss Severity andLoss Frequency Source: Garman & Forgue (2008). Personal Finance 16
  • 17.
    Common Insurance Errors •Not following the “large loss principle” • Unfamiliarity with employer-provided (and public) insurance benefits • Lack of disability insurance • Lack of adequate liability insurance • Not checking credit rating of insurance companies 17
  • 18.
    Parts of anInsurance Contract • Declarations page • Insuring Agreements • Exclusions • Endorsements and Riders 18
  • 19.
    Policy Features that LimitInsurance Coverage • Benefit coordination clauses • Deductible • Elimination period • Co-payment • Co-insurance • Policy limit 19
  • 20.
    Generally Unnecessary InsurancePolicies • Credit insurance for individually purchased items (e.g., life, disability, unemployment) • Cancer insurance • “Double Indemnity” insurance riders • Hospital indemnity policies • Flight insurance • Car rental collision-damage waivers 20
  • 21.
    Question #2: Do YOUhave a life insurance policy? Why or why not? 21
  • 22.
    Question #3: Does ayoung unmarried adult without children need life insurance? Why or why not? 22
  • 23.
    Question #4: Do minorchildren need life insurance? Why or why not? 23
  • 24.
    Why Do PeopleNeed Life Insurance? • Income-Replacement Needs – Financial losses resulting from premature death: lost income and employee benefits • Major Expenses – Two examples are a mortgage and children’s college expenses • Final Expenses – One-time medical and funeral expenses occurring just prior to or after a death • Readjustment-Period Needs – Allows surviving spouse/family members to pay ongoing expenses 24
  • 25.
    Powerful Life InsuranceVideo: A Legacy of Love https://www.youtube.com/watch?v=ZKHftmG WoEM 25
  • 26.
    Financial Planning WithLife Insurance Primary Purposes of Life Insurance: •Protect someone who depends on you (or owes money on your behalf) from financial losses related to your death •Reduce financial burdens of survivors •Insurance company promises to pay a lump sum (death benefit) to a named beneficiary at the time of the policy holder’s death •Some policies pay benefits while a policyholder is still alive 26
  • 27.
    Other Reasons WhyPeople Buy Life Insurance • Pay off a mortgage or debts • Lump-sum endowments for children • Make charitable donations • Accumulate savings • Establish a regular income for survivors • Set up an estate plan (e.g., fund trusts with life insurance benefits) • Pay estate and gift taxes (e.g., business owners) 27
  • 28.
    How Life InsuranceWorks • Life insurance is obtained by purchasing a policy 28
  • 29.
    More About LifeInsurance • Mortality Tables- Provide odds of people dying, based on age and gender • Premium is based on life expectancy and projections for payouts for persons who die (called actuarial tables) – Older people pay more because they will die sooner • Face Amount- Dollar value of protection listed in the policy and amount used to calculate the premium (e.g., $100,000) • Group Term Insurance- Issued to people as members of a group rather than as individuals 29
  • 30.
    • Multiple ofSalary Method – A multiple (7x, 10x) of a deceased person’s salary • The DINK Method – Dual income, no kids, similar incomes – Assumes spouse’s earnings will continue – Cover funeral + ½ of mortgage and other debts • The “Family Need” Method – More thorough than the first two methods – Considers employer-provided insurance, family goals, Social Security benefits, spouse’s income and assets Estimating Life Insurance Need 30
  • 31.
    Question #5: What resourcesdo YOU use to help clients calculate their life insurance need? 31
  • 32.
  • 33.
    Life Insurance Worksheet#1 http://njaes.rutgers.edu/money/pdfs/session-ii.pdf 33
  • 34.
  • 35.
    Online Life InsuranceCalculators • Morgan Stanley: https://sw- landings.s3.amazonaws.com/zzzzmqh-media.pdf • Life Happens: http://www.lifehappens.org/insurance- overview/life-insurance/calculate-your-needs/ • State Farm: https://www.statefarm.com/insurance/life/resources/life-needs- calculator • Bankrate.com: http://www.bankrate.com/calculators/insurance/life-insurance- calculator.aspx 35
  • 36.
    Question #6: Do yourecommend Term life insurance? Whole life insurance? Or both? 36
  • 37.
    Term Life Insurance TermLife – Protection for a specified period of time – Like “renting insurance” – Ends at the end of term (or if you stop paying premiums) Renewable Term- Can renew; higher premium charged Multiyear Level Term- Same premium for a long set period Conversion Term- Allows change to permanent policy Decreasing Term- Face value decreases over time 37
  • 38.
    • Often providedas employee benefit (e.g., 1.5 x salary) • Least expensive type of life insurance coverage • No cash value • Gets more expensive with age • May not be able to renew after 65 or with health “issues” More About Term Life Insurance 38
  • 39.
    • Combines coverageand investment (cash value) • Can borrow against the cash value • Major types: whole life, universal life, variable life • Usually need to hold a long time for cash value to become a large dollar amount Permanent Life Insurance 39
  • 40.
    Cash-Value Life Insurance Source:Garman & Forgue (2008). Personal Finance 40
  • 41.
    Permanent Life InsuranceDetails • Straight-Life or Whole-Life Insurance – Pay the premium as long as you live – Premium depends on age when you start the policy – Accumulates a cash value you can borrow against – Look carefully at the rate of return your money earns • Limited Payment Policy – You pay premiums for a stipulated period – Policy is then “paid up” and you remain insured for life • Variable Life - Fixed premiums; investment subaccounts • Universal Life- Can change premium, time period, benefit 41
  • 42.
    Buy Term LifeInsurance and Invest the Difference? Source: Garman and Forgue (2008). Personal Finance 42
  • 43.
    Key Provisions ina Life Insurance Policy • Beneficiary and contingent beneficiaries (those who will receive benefits upon the insured’s death) • Incontestability clause  after policy has been in force for a specified period, company can’t dispute its validity for any reason (usually 2 years) • Length of grace period for late payments • Reinstatement rules for a lapsed policy • Non-forfeiture clause allows you to keep accrued benefits in a whole life policy if you drop the policy • Misstatement of age provision (benefits paid on real age) • Policy loan provision to borrow against cash value • Suicide clause during first two years (only get back premiums) • Policy rider modifies coverage by adding or altering benefits 43
  • 44.
    Life Insurance SettlementOptions Settlement Options: Choices of how an insurance benefit is paid out – Lump-Sum Payment • Most common method – Limited Installment Plan • Equal installments for a specific number of years after death (10-year certain) – Life Income Option • Payments to the beneficiary for life – Proceeds Left with the Company • Pays interest to the beneficiary 44
  • 45.
    Buying Life Insurance: Factorsto Consider • Present and future sources of income for dependents – Other savings and income protection – Group life insurance – Pension benefits – Social Security benefits • Financial strength of the insurance company 45
  • 46.
    Buying Life Insurance:Gathering Data Determine from whom to buy your policy – Research the company’s rating by major rating companies: • A. M. Best • Standard and Poor’s • Duff & Phelps • Moody’s • Weiss Research – Talk to family, friends, colleagues, advisors – Online premium quote services The image part with relationship ID rId1 was not found in the file. 46
  • 47.
    Male, born 1/1/1980;190 lb; Living in New York State $400,000 term insurance – 10 years Preferred (best health); never smoked; $55+ per quarter ($220/yr) Standard, current smoker $155+ per quarter ($620/yr) Sample Life Insurance Estimate Source: www.directquote.com 47
  • 48.
    Types of LifeInsurance Companies and Policies 2 Types of Life Insurance Companies Type of Company Owned by Stock life Insurance Shareholders Mutual life insurance Policyholders Source: Kapoor, Dlabay, Hughes, & Hart (2016). Focus on Personal Finance
  • 49.
    Mutual Life InsuranceCompanies • Owned by policyholders • Participating policy premiums are higher than non- participating policies • Part of the participating premium is refunded to policyholders annually in the form of a dividend • Examples: Mutual Benefit Life Insurance, Liberty Mutual, Massachusetts Mutual Life Insurance 49
  • 50.
    Should You EverSwitch Policies? It Depends! • Switch if benefits exceed costs of getting another physical and paying policy set-up costs • The older you are, the higher the premium • Are you still insurable? • Can you get all the provisions you want? • Don’t cancel an old policy until new policy is in hand 50
  • 51.
    Choosing an InsuranceAgent • Ask friends, family, colleagues, and neighbors for recommendations. • Does an agent belong to professional organizations? • Is the agent a Chartered Life Underwriter (CLU)? • Is the agent willing to take the time to answer questions and find a policy that is right for you? • Do you feel pressured? • Is the agent available when needed?
  • 52.
    Insurance is Regulatedat the State Government Level 52
  • 53.
    Life Insurance Video: Whatis Life Insurance? https://www.youtube.com/watch?v=cazn9l4CEvk 53
  • 54.
    VETERANS BENEFITS ADMINISTRATION RuthBerkheimer, Insurance Specialist, VA Insurance Center VA Life Insurance Programs MFLN Webinar April 5, 2016
  • 55.
    VETERANS BENEFITS ADMINISTRATION CustomerBase – 6.3 million Insured • 2.3 Million Servicemembers • 2.8 Million Spouses/Children • 429,000 Post-1992 Veterans The image part with relationship ID rId1 was not found in the file. • 475,000 WWII, & Korean Era Veterans • 272,000 Disabled Veterans Source: Feb. 29, 2016 Exhibit of Insurance Inforce 55
  • 56.
    VETERANS BENEFITS ADMINISTRATION FaceAmount of Coverage: VA vs. Private Industry Met Life $4.4 Trillion Prudential $3.8 Trillion VA $1.3 Trillion 11th largest insurer Northwestern Mutual $1.5 Trillion Aegon USA $1.5 Trillion Scor Life $1.7 Trillion RGA Group $1.9 Trillion AIG Life & Retirement $1.5 Trillion Lincoln Financial $1.3 Trillion Voya Financial $1.4 Trillion Source: Best's Review September 2015 Swiss Life $1.3 Trillion 56
  • 57.
  • 58.
    VETERANS BENEFITS ADMINISTRATION SupervisedPrograms • Servicemembers’ Group Life Insurance • SGLI Family Coverage • SGLI Traumatic Injury Protection • SGLI Disability Extension • Veterans’ Group Life Insurance 58
  • 59.
    VETERANS BENEFITS ADMINISTRATION Servicemembers’Group Life Insurance (SGLI) • Active duty, Reservists and Guard automatically insured for $400,000 • Member has option to decline or reduce the coverage in increments of $50,000 • Coverage is 24/7, no restrictions • $28 monthly premium, plus $1 for traumatic injury coverage, deducted from pay • Coverage continues for 120 days after discharge at no cost to member • Member can apply for an extension of SGLI for up to 2 years if: – Disabilities prevent member from being gainfully employed, or – Member has certain statutory disabilities Pages 30-34 of VA Life Insurance Handbook 59
  • 60.
    VETERANS BENEFITS ADMINISTRATION Servicemembers’Group Life Insurance (SGLI) Active Duty Ready Reserve Participation Policy Year 2015 93%99% 60
  • 61.
    VETERANS BENEFITS ADMINISTRATION SGLIFamily Coverage (FSGLI) • Spouse Coverage – Automatic coverage for non-military spouses (spouse must be registered in DEERS) – Spouses who are also in the military must apply – $100,000 maximum or amount of member’s coverage, whichever is less – Age-based premiums • Child coverage – Automatic for all members covered by SGLI; member does not have to have spouse coverage to have child coverage – No charge to Servicemembers – Benefit for Stillbirth – Effective 10/10/2008 • Servicemember is always beneficiary Pages 38-41 of VA Life Insurance Handbook 61
  • 62.
    VETERANS BENEFITS ADMINISTRATION SGLIFamily Coverage (FSGLI) FSGLI spouse coverage terminates 120 days after any of the following: – Member separates from the military – Divorce – Member elects in writing to terminate spouse SGLI coverage – Member elects in writing to terminate his/her SGLI coverage – Death of member FSGLI child coverage terminates 120 days after any of the following: – Member separates from the military – Member elects in writing to terminate his/her SGLI coverage – Death of member – Child no longer qualifies as an insurable dependent Conversion option – Spouse coverage can be converted to an individual policy within 120 days of above events – Dependent child coverage cannot be converted 62
  • 63.
    VETERANS BENEFITS ADMINISTRATION FSGLI– National Defense Authorization Act 2013 NDAA 2013 repealed automatic enrollment in FSGLI for members who are married to other members effective January 2, 2013 • If marriage occurred before 1/2/2013 : – Spouse coverage is automatically issued to both spouses – Coverage is effective on the date of the marriage – Premium is owed from the date of marriage • If marriage occurred on or after 1/2/2013: – Coverage is not automatically issued – If spouse coverage is desired, an application for spouse coverage must be submitted (SGLV 8286A) – Coverage is effective on the date of application, if application is approved – Premium is due from the date of application if coverage is issued 63
  • 64.
    VETERANS BENEFITS ADMINISTRATION SGLITraumatic Injury Protection (TSGLI) • Effective Dec. 1, 2005; retroactive to Oct. 7, 2001 regardless of geographic location where injuries occurred • Provides financial benefit to those suffering serious traumatic injuries to help with expenses during treatment and recovery • Automatic for members who have SGLI (retroactive regardless of SGLI coverage) • Premium is $1/month • Must suffer qualifying loss due to a traumatic injury to receive payment • Benefit from $25K to $100K, depending on type of loss or length of recovery period • Branch of Service TSGLI Offices evaluate and certify claims for their members • Not just a combat benefit Pages 35-37 of VA Life Insurance Handbook 64
  • 65.
    VETERANS BENEFITS ADMINISTRATION SGLITraumatic Injury Protection (TSGLI) • Benefit ranges from $25K - $100K • Examples of losses covered:  Loss of limbs  Loss of vision, hearing, speech  Plegias  Burns  15-day hospitalization • Types of losses not covered:  Mental illness such as PTSD  Physical illness or disease 65
  • 66.
    VETERANS BENEFITS ADMINISTRATION TSGLI- Criteria for Payment • Suffer a qualifying loss as the result of a traumatic event while in service • Covered by SGLI when traumatic event occurs (except for retroactive period) • Traumatic event must occur prior to separation from service (loss can occur after separation) • Loss is a direct result of the traumatic event • Loss occurs within 2 years (730 days) of traumatic event • Survive 7 days from date of traumatic event 66
  • 67.
    VETERANS BENEFITS ADMINISTRATION SGLIDisability Extension • For separating Servicemembers who: – are unable to work due to their disabilities, or – have certain statutory conditions • Extends SGLI coverage free of charge for up to two years from separation or until able to maintain gainful employment • Member must apply • If approved for SGLI Disability Extension, automatically converted to VGLI at end of two years (VGLI premiums not waived) • We call recently separated disabled Veterans to advise them of the full range of VA Life Insurance benefits Page 32 of VA Life Insurance Handbook 67
  • 68.
    VETERANS BENEFITS ADMINISTRATION Veterans’Group Life Insurance (VGLI) • Initial Maximum Coverage = Amount of SGLI at separation • Member must apply unless on the SGLI Disability Extension • 1 year and 120 days from separation to apply; if within 240 days of separation, no proof of health required • Age-based premiums • Can increase coverage by $25,000 on five-year anniversary date up to $400,000 maximum • Great transition insurance; Separating Servicemembers should be encouraged to apply until they obtain other coverage • Renewable for life, or convert The image part with relationship ID rId1 was not found in the file. Pages 42-48 of VA Life Insurance Handbook 68
  • 69.
    VETERANS BENEFITS ADMINISTRATION BeneficiaryFinancial Counseling Service (BFCS) • No cost financial planning services available to beneficiaries of SGLI, FSGLI, TSGLI and VGLI ₋ Service provided by FinancialPoint® ₋ Objective financial professionals – do not receive commission • Beneficiaries can provide information online and a financial plan will be prepared for them. • Beneficiaries can request a face-to-face meeting with a financial professional. • Beneficiaries can call to get quick answers to financial questions or to request a detailed financial plan. 69
  • 70.
    VETERANS BENEFITS ADMINISTRATION OnlineWill Preparation • Online will preparation services are available to beneficiaries at no cost to them. • Service enables beneficiaries to prepare a will online without an attorney. • Answer a series of questions and receive a legal will, valid in all 50 states, ready to print and sign. • Documents how assets will be distributed in the event of death. 70
  • 71.
    VETERANS BENEFITS ADMINISTRATION AcceleratedBenefit Option (ABO) • Member (or spouse for FSGLI) must be terminally ill with a prognosis of 9 months or less to live • Insured can receive up to 50% of the face amount of coverage • Reduces death benefit • Non-taxable 71
  • 72.
  • 73.
    VETERANS BENEFITS ADMINISTRATION Service-DisabledVeterans’ Insurance • $10,000 maximum basic coverage • Must have received a service-connected disability rating from VA of at least 0% • Must apply within two years of a rating for a new service-connected disability • Must be in good health except for service-connected disabilities • Premiums can be waived if totally disabled • If approved for waiver of premiums, Veteran may purchase up to $30,000 of supplemental insurance (premiums cannot be waived on supplemental) The image part with relationship ID rId1 was not found in the file. Pages 23-26 of VA Life Insurance Handbook 73
  • 74.
    VETERANS BENEFITS ADMINISTRATION Veterans’Mortgage Life Insurance • Up to $200,000 of mortgage coverage • Must have received a specially-adapted housing grant from VA • Coverage reduces with mortgage balance • Payable only to the mortgage company • Cannot be issued after age 69 • Premiums based on Veteran’s or Servicemember’s age, mortgage balance, and length of mortgage Pages 27-29 of VA Life Insurance Handbook 74
  • 75.
    VETERANS BENEFITS ADMINISTRATION InsuranceInternet - Self-Service Veterans can perform many functions themselves, including:  Access Policy information  Borrow from Policies  Find and download Insurance related forms  Learn how to file a disability or death claim  Apply for Insurance on-line  Beneficiaries can learn how to get financial counseling  Learn how to convert from SGLI to VGLI  Change Address (VGLI insureds)  Pay premiums from credit card or checking account www.benefits.va.gov/insurance 75
  • 76.
    VETERANS BENEFITS ADMINISTRATION VAInsurance Website www.benefits.va.gov/insurance
  • 77.
  • 78.
    VETERANS BENEFITS ADMINISTRATION On-DemandTraining www.benefits.va.gov/insurance/training1.asp VA Insurance Website - Training
  • 79.
    VETERANS BENEFITS ADMINISTRATION VAInsurance Website - Forms http://www.benefits.va.gov/INSURANCE/resources-forms.asp
  • 80.
    VETERANS BENEFITS ADMINISTRATION ProgramContact Information for SGLI, FSGLI, VGLI Claims Office of Servicemembers’ Group Life Insurance (OSGLI) – Address: 80 Livingston Avenue, Roseland, NJ 07068 – Telephone Numbers: • 800-419-1473, Monday through Friday, 8:00 am to 5:00 pm Eastern • Main Fax: (800) 236-6142 • Claims Fax: (877) 832-4943 – E-Mail: • Claims Only (Death & TSGLI): osgli.claims@prudential.com • TSGLI Appeals: tsgli.appeals.osgli@prudential.com • All Other: osgli.osgli@prudential.com 80
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    VETERANS BENEFITS ADMINISTRATION Branchof Service TSGLI Offices • Servicemembers should contact their Branch of Service TSGLI Office • Contact information for these offices can be found at: Program Contact Information for TSGLI www.benefits.va.gov/insurance/forms/ SGLV_8600_ed2014-06.pdf 81
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    VETERANS BENEFITS ADMINISTRATION ProgramContact Information for S-DVI, VMLI VA Insurance Center – Address: VA Insurance Center, P.O.Box 7208, Phila., PA 19101 – Telephone Numbers: • 800-669-8477, Monday through Friday, 8:00 am to 6:00 pm Eastern • Main Fax: (888) 748-5822 • Claims Fax: (888) 748-5822 – E-Mail: • Go to https://insurance.va.gov/mypolicy/mypolicy.htm 82
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    VETERANS BENEFITS ADMINISTRATION ContactInformation Ruth Berkheimer, Insurance Specialist VA Insurance Center, Philadelphia, PA Phone: 215-842-2000, ext. 4275 ruth.berkheimer@va.gov 83
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    What is onesignificant thing you learned today? 85
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    Evaluation and ContinuingEducation Credits/Certificate of Completion MFLN Personal Finance is offering 1.5 credit hours via a certificate of completion for today’s webinar from AFCPE for AFC-credentialed participants and FinCert for CPFC- credentialed participants. To receive a certificate of completion, please complete the evaluation and post-test at:https://vte.co1.qualtrics.com/jfe/form/SV_3x8v39pgTpMA8 w5 Must pass post-test with 80% or higher to receive certificate. 86
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    Personal Finance UpcomingEvent Credit Scores: What’s New? • Date: Tuesday, May 3, 2016 • Time: 11 a.m. Eastern • Location: https://learn.extension.org/events/2488 For more information on MFLN Personal Finance go to: https://blogs.extension.org/militaryfamilies/personal-finance/ 87
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    www.extension.org/62581 This material isbased upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Readiness Policy, U.S. Department of Defense under Award Numbers 2014-48770-22587 and 2015-48770-24368. The image part with relationship ID rId1 was not found in the file.The image part with relationship ID rId1 was not found in the file. The image part with relationship ID rId1 was not found in the file. 88
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    Research and evidenced-based professionaldevelopment through engaged online communities www.extension.org/militaryfamilies Sign up for webinar email notifications at www.extension.org/62831 89