Chapter 1: Life Insurance

1

How much life insurance do I need for my family?

1

  Immediate Expenses

2

  Future Expenses

3

  Calculate all assets

5

  Major Functions

9

Term Insurance

10

  Annual Renewable & Convertible Term

11

  Decreasing & Level Term

12

  Deposit Term Insurance

12

Cash Value Insurance

13

  Whole Life Insurance

13

  Straight Life/Limited Payment

14

  Preferred Risk Policies

15

Interest-Sensitive Whole Life

15

Universal Life Insurance

16

  Modified Endowment Contract

18

Adjustable Life Contracts

19

Variable Life Insurance

19

Survivorship Life Insurance

21

Single Premium Life Insurance

21

Endowment Insurance

23

Blended Policies

24

  Family Protection Blended Policies

25

Credit Life Insurance

25

Travel Life Insurance

25

Choosing an Insurance Company

27

Children’s Insurance Needs

28

  Life Insurance

28

  Are There Any Advantages?

29

  Health Insurance

29

Chapter 2: Health Insurance

31

What the Affordable Care Act Established

32

  Pre-Existing Condition Protections

32

  Essential Health Benefits

32

  Dependent Coverage

32

  Medicaid Expansion

33

  Health Insurance Exchanges

33

  Premium Tax Credits and Cost-Sharing Reductions

33

  Employer Requirements

33

  The Individual Mandate

33

  Metal Tier Structure

34

  Enrollment Periods

34

Benefits by Groups

34

  Benefits for Children

35

  Benefits for Young Adults

35

  Benefits for Early Retirees

36

  Benefits for Senior Americans

36

  Benefits for Minorities

37

  Benefits for Disabled Americans

37

  Benefits for Veterans and Military Personnel

38

  Benefits for Small Businesses

38

How ACA Plans Work – A Producer's Guide

38

  Helping Clients Choose a Metal Tier

39

  Premium Tax Credits

39

  Health Savings Accounts and High-Deductible Health Plans

40

  COBRA Continuation Coverage

40

  Special Enrollment Periods

41

Where Are We Headed?

41

  Association Health Plans

42

  What is Likely to Remain

43

Group Health Insurance

43

  How Group Plans Are Structured

43

  Fully Insured vs. Self-Insured Plans

44

  Network Types

45

  The Producer's Role in Group Benefits

45

Medicare

46

  Medicare Part A

46

  Medicare Part B

47

  Medicare Part C

47

  Medicare Part D

48

Medicare Supplement Insurance

49

  Standardized Plan Letters

49

  When to Buy

50

  Medigap and Part D

50

  Premium Structures

50

HIPAA and Health Insurance Portability

51

  Pre-Existing Condition Limitations Under Group Plans

51

  Special Enrollment Rights

52

  HIPAA Privacy Protections

52

  HIPAA and Electronic Transactions

53

  The Relationship Between HIPAA and the ACA

53

Underwriting in the Non-ACA Health Insurance Market

53

  How Medical Underwriting Works

53

  Application Accuracy

54

  What to Communicate to Clients

54

Coordination of Benefits

55

  Primary and Secondary Coverage

55

  The Birthday Rule

55

  Medicare as Primary or Secondary

56

  The Medicaid Exception

56

  COB and the Non-Duplication Provision

56

  A Coordination of Benefits Example

57

  What Producers Should Communicate

58

Incidental Health Care Protection

58

  Dread Disease Insurance

58

  Hospital Indemnity Insurance

59

  Dental Policies

59

  Health Coverage for Overseas Travelers

60

  Blanket Health Insurance

61

  Group Credit Health Insurance

61

Chapter 3: Disability Insurance

63

The Need for Disability Insurance is Greater than You Think

63

Why Not Replace 100 Percent of the Family Income?

65

Determining the Amount of Coverage Needed

66

Social Security Does Not Supply the Income a Policy Will

67

Worker’s Compensation

68

Degrees of Disability Affects Policies & Programs

69

How Soon Should Disability Policy Benefits Begin?

70

Determining the Duration of Policy Benefits

71

Managing the Disability Income Benefits

71

Finding the Right Disability Policy

72

Employer-Provided Disability Coverage

72

Association Group Disability Insurance

73

Individual Coverage

74

Marketing Disability Income Products

77

Description of the Optional Provisions

78

  Waiver of Premium/Non-occupational Provision

78

  Transplant/Rehabilitation/Non-disabling/Preexisting/Free-Look

79

Common Riders

80

  Return of Premium Rider

80

  COLA/Social Security/Purchase Option Rider

80

  Residual Disability Income/Family Income Rider

81

  Accidental Death and Dismemberment Rider

81

Occupational Classifications

82

Special Circumstances

83

Is underwriting necessary?

84

The Insurance Producer’s Role in Underwriting

84

The Underwriting Process

85

Moral & Morale Hazards

87

The Underwriting Decision

88

Social Insurance/SSDI & SSI

89

Application for Social Security Benefits

91

Defining Substantial Gainful Activity (SGA)

91

Residual Functional Capacity (RFC)

92

Life and the Application

92

Supplemental Security Income (SSI)

94

Who is eligible for SSI?

94

Commonly Asked Questions

95

Chapter 4: Pet Insurance

97

North American Pet Health Insurance Association (NAPHIA)

97

Total U.S. Pet Industry Expenditures

97

Breakdown

97

Policy Exclusions

98

Considerations

99

Pet Insurance Model Act Key Elements

100

NAIC Model Law

101

Section 1. Short Title

101

Section 2. Scope and Purpose/Section 3. Definitions

101

Section 4. Disclosures

103

Section 5. Policy Conditions

105

Section 6. Sales Practices for Wellness Programs

106

Section 7. Insurance Producer Training

107

Section 8. Regulations

107

Section 9. Violations

108

Pet Insurance -  A Growing Market Worth Understanding

109

Chapter 5: Planning for Retirement

109

Pre-Planning

109

Retirement Funding

110

Determining How Much Money Will Be Needed in Retirement

111

Annuities are issued by Insurance Companies

112

Parties to an annuity contract

113

  The Insurer/The Contract Owner

114

  The Annuitant/The Beneficiary

115

Annuity Development

116

Annuity Investment Options

118

  Immediate Annuities

118

  Immediate Variable Annuities

120

Using Variable Annuities for Retirement Planning

121

Deferred Annuities

124

Equity-Index fixed Annuity

125

Accumulation Annuity/ Which annuity is best?

126

What is Annuity Annuitization?

128

Why Annuitize?

131

Bailout Provision

132

What are Some Annuity Advantages?

133

  FDIC

133

  No-load or Commission-free

137

  Avoidance of probate

138

Disadvantages

139

  Surrender charges

140

Pension Plans

141

  Defined benefit plan

142

  Defined contribution plan

142

Longevity Affects Insurance and Underwriting

143

Long-Term Care Insurance

144

Defining Long-Term Care

144

Determining the Necessity

145

Defining LTC Policy Benefits

148

  Skilled Nursing Facility Care

148

  Intermediate/Custodial Nursing Care

149

Long-Term Care Insurance Policies

149

Medicare-certified agency coverage

152

Medicare’s Part A and Part B

153

Gaps in Medicare Hospice Coverage

153

Types of Care Facilities

155

Qualifying for a Policy

156

No Policy Covers Everything

156

Activities of Daily Living

158

Tax-Qualified Long-Term Care Contracts

159

Specific Definitions

159

Understanding the Difference in Benefit Triggers

160

Federal Criteria

161

Assessing the Need/Realistically Speaking

162

Asset Inventory

163

Liabilities

164

LTC Applicable Estate Planning Tools

165

Asset Transfer

166

Government-Sponsored Programs

166

Reverse Mortgages

167

Paid Family Members

170

Accelerated Life Insurance Benefits

170

The Largest Payer of LTC Benefits is Medicaid

171

Asset Transfers for Medicaid Eligibility

172

Any Income Available

174

Chapter 6: Paying for College

175

Suggestions for saving for college

175

  Tuition and fees/Room and board

176

  Personal expenses/Books and Supplies/Travel and transportation

177

Estimating College Expenses

177

How much does a family need to save?

178

What is the best way to invest for college?

179

Deciding which savings vehicles to use

179

Bank Accounts/Certificates of Deposit (CDs)

180

529 Plans

181

Typical CDs

182

College Savings Bank

183

Bonds

184

Life Insurance

185

Annuities/Annuity Options

186

  Single-Pay Deferred Fixed Annuity

186

  Accumulation Annuity/Two-tiered annuities

186

  Wrap-Around Annuity/CD-like Annuities

187

Mutual Funds

188

UGMAs or UTMAs

189

2503(c) Minor’s Trust

189

Prepaid Tuition Plans

190

Financial Aid

191

Keep College Expenses Down

192

  AP Courses & Exams in High School

193

  The Family Plan/Alumni Discount/Attending Community College

193

Chapter 7: Integrating Insurance with Financial Planning

194

Life Insurance and Wills

194

  Codicil

195

  Using a Lawyer

196

Homemade Wills/Joint Wills

198

Rule of Revocation

199

Probate/Living Wills

200

  Health-care durable power of attorney/Health-care proxy

201

Living Trusts

201

Homemade Trusts/Funded Trusts

203

Revocable Living Trusts

205

Avoiding Probate/Revocable Living Trust Disadvantages

207

Power of Attorney

208

Guardians, Conservators & Committees

209

Irrevocable Living Trusts

210

Types of Irrevocable Living Trusts

212

Uniform Gifts to Minors

214

Testamentary Trusts

214

Combination Trusts

215

Trust Record Keeping/Trustees

216

Planning for Death

217

Joint Accounts

218

Choosing an Attorney

219

Special Provisions

220

Beneficiary Designations

225

Types of Estates

225

Special Agreements

226

Domiciles and Property Ownership

227

Gifting & Other Property Disbursement

229

Following Legal Procedures

235

Insurance Policies Transfer Through Contract Designation

237

Selecting Trustees & Other Representatives

238

Settling the Estate after the Testator’s Death

242

  Delays

243

  Postmortem Management

246

The Gross Estate

248

Insurance for Funeral Planning and Final Expenses

251

Chapter 8: Insurance Ethics

253

  The definition of ethics

253

  Agent Liability

254

Annuity Best Interest Standards

256

  Disclosure Obligation

259

  Conflict of Interest Obligation

262

  Documentation Obligation

266

  Components of Suitability Obligations

267

What are Ethics?

268

Our Past Becomes Our Present

269

Who Determines Ethics?

270

Ethical Decisions

271

Promoting Ethical Behavior

272

Egoism versus Egotism

275

  What is the scope of ethics?

276

  What does it take to be a moral person?

277

“What do I want my legacy to be?”

277

 Example

279

  What are our responsibilities to other moral persons?

281

Selling Ethically

282

  Education

282

  Laying Out Policy Benefits & Limitations

282

    Full Disclosure

284

Policy Replacement

285

  Why would an agent replace their own business?

285

When the Agent Allows Misconceptions

286

When Premium Appears Too High

288

Obtaining Proper Signatures

288

Keeping in touch after the Sale

288

Selling the “Fast Buck” Items

289

Commingling Funds

290

Following Regulations

291

Competency

292

  Simultaneous representation

293

Financial Strength of an Insurer

294

  Admitted Assets/Consolidated Assets

295

  Investment Grade Issues

295

  Capital Ratio

297

  Net Premium Income

297

  Surplus Reinsurance

297