Personal Life Insurance Planning (Course Id 2467)

Personal Life Insurance Planning examines the type of client data needed to determine minimum life insurance coverage requirements. It identifies the various lump-sum cash needs at the death of a breadwinner and provides guidelines to enable advisers to recommend life insurance in amounts that fully protect clients. It identifies typical surviving family income needs following a breadwinner’s death. Advisers learn to calculate adequate survivor income and appropriate life insurance needed to provide required income. Social Security survivor benefits are discussed, including the Child’s benefit, the Mother’s or Father’s benefit, and Widow’s and Widower’s benefit.

NASBA QAS - Text - NASBA Registry - 2467

Course Learning Objectives

1. Describe the early attempt to calculate appropriate life insurance amounts known as the human life value method.
2. Understand the importance of basing client insurance requirements on a thoroughgoing analysis of needs.
3. Gather the appropriate client information required to perform an insurance needs analysis.
4. Identify and calculate a client’s family’s lump-sum needs at the death of a breadwinner.
5. Understand the Social Security survivor benefits that need to be considered in analyzing survivors’ needs for life insurance to replace income.
6. Identify and calculate survivors’ income needs during the dependency period, blackout period and retirement period.

Chapter 1
Introduction to Human Life Value & Needs Analysis

Chapter 2
Gathering Client Information for Needs Analysis

• Identify the types of customer information needed to determine appropriate life insurance needs; and
  
• Explain why information concerning a customer’s financial situation, objectives and risk tolerance is necessary to the personal life insurance planning process.

Chapter 3
Identifying and Calculating Lump-Sum Financial Needs at Death

• Identify the principal lump-sum family financial needs following a breadwinner’s death;
  
• List the immediate cash needs generally experienced by surviving members of a deceased breadwinner’s family;
  
• Describe the principal estate administration costs; and
  
• List the primary uses of an emergency fund for surviving family members.

Chapter 4
Social Security Survivor Benefits

• Determine the difference between “currently insured” and “fully insured” and the consequences for surviving family members of the worker’s Social Security insured status;
  
• Calculate the Social Security survivor benefits lost by a beneficiary’s receipt of excess earned income; and
  
• List the criteria applicable to eligibility for each Social Security survivor benefit.

Chapter 5
Identifying Income Needs At Death

• Describe when a surviving family’s dependency period, blackout period and retirement period begin and end;
  
• Explain when the Social Security mother’s or father’s benefit ends; and
  
• Identify when the Social Security child’s benefit ends.

Chapter 6
Calculating Survivor Income Needs at Death

• Calculate the amount of life insurance needed to provide survivor income liquidating capital and income; and
  
• Calculate the amount of life insurance needed to provide survivor income using income only and retaining capital.

Course Learning Objectives

How You Will Learn

Why This Information is Important and How You Can Use It

Chapter 1 - Introduction to Human Life Value & Needs Analysis

Chapter Learning Objectives

Important Lesson Points

Determining Insurance Amounts — Human Life Value

Capitalized Value of Net Earnings

Human Life Value Case Study

Bill Jones’ Life Insurance Need — Human Life Value Approach

Human Life Value Limitations

Determining Insurance Amounts — Advantages of Insurance Needs Analysis

Summary

Test Your Comprehension - Chapter 1

Chapter 2 - Gathering Client Information for Needs Analysis

Chapter Learning Objectives

Important Lesson Points

Required Data

Current Income

Accumulated Assets

Liabilities

Goals and Objectives

Risk Profile

Building Rapport and Creating Trust

Responsive Listening

Establishing Credibility

Effective Information Gathering

Summary

Test Your Comprehension - Chapter 2

Chapter 3 - Identifying and Calculating Lump-Sum Financial Needs at Death

Chapter Learning Objectives

Important Lesson Points

Lump-Sum Cash Needs

Burial & Final Medical Expenses

Estate Administration Costs

Federal & State Taxes

One Month’s Current Income

Consumer Debt Liquidation

Emergency Fund

Mortgage Redemption or Rental Payment Fund

Dependent Care

Education

Summary

Test Your Comprehension - Chapter 3

Chapter 4 - Social Security Survivor Benefits

Chapter Learning Objectives

Important Lesson Points

Introduction to Social Security Benefits

Important Social Security Definitions

Currently Insured Social Security Survivor Benefits

Fully Insured Social Security Survivor Benefits

Mother’s or Father’s Benefit

Summary

Test Your Comprehension - Chapter 4

Chapter 5 - Identifying Income Needs At Death

Chapter Learning Objectives

Important Lesson Points

Introduction

The Dependency Period

The Blackout Period

The Survivor’s Retirement Period

Summary

Test Your Comprehension - Chapter 5

Chapter 6 Calculating Survivor Income Needs at Death

Chapter Learning Objectives

Introduction

A Process of Estimation

Determining the Capital Need

When Income is Not Needed for Several Years

The Client Wishes to Use Interest and Capital

Using Interest and Capital—Income Not Needed for Several Years

Projecting Future Income Needs

Dependency Period

Blackout Period

Retirement Period

Capital Retention

Summary

Test Your Comprehension - Chapter 6

Appendix A

Present Value Factor for Annuity Table

Appendix B

Present Value Factor for Single Sum Table

Appendix C

Calculating Survivors’ Income Needs

Glossary