Insurance & Divorce

Table of Contents

 

Chapter 1

The Reality

Page 1

 

     American Statistics

1

 

     Plan, Plan, Plan

2

 

     Preserving the Creating Assets

               Financial planning steps for divorce

4

5

 

          Net Worth

6

 

          Chart: Net Worth

6

 

          Charts:  Cash Flow

8

 

          Chart:  Goals

12

Chapter 2

Many Professionals Involved

13

 

     Finding the Right People

13

 

     Insurance Agents

13

 

     Financial Planners

14

 

     Bankers

15

 

     Accountants

      16

 

     Attorneys

               Divorce is a 3 step process

      17

18

 

     Division of Assets

19

 

     Using Life Insurance to Guarantee Future Security

21

 

               QDRO

22

 

     Avoiding Financial Ruin

22

 

     Specialists Everywhere

23

Chapter 3

Insurance

24

 

     Insurance Consequences of Divorce

24

 

     Life Insurance

24

 

     Determining Appropriate Life Insurance Amounts

     Determining Appropriate Type of Life Insurance

25

27

 

               Employee Life Insurance

29

 

               Teacher’s Life Insurance

30

 

               Term Life Insurance

30

 

               Ordinary or Traditional Whole Life

33

 

               Variable Life Insurance

36

 

               Limited Payment Life

36

 

               Endowment Insurance

37

 

               Universal Life Policies

37

 

     Insurance Riders

38

 

     Grace Periods – Reinstatement

38

 

     Incontestability

39

 

     Suicide

39

 

     Policy Ownership

39

 

     Finding the Right Company

40

 

     Changing Companies

40

 

     Life Insurance As An Investment

42

 

     Annuities in Divorce Settlements

44

 

               Deferred Annuities

44

 

                         How Long Will Your Money Last? (Chart)

44

 

               Variable Deferred Annuities

45

 

     Health Insurance

49

 

     Universal Health Care

49

 

     Dental Policies

53

 

     Medigap Policies and Medicare

53

 

     Defining Medicare & Medicaid

54

 

     Social Insurance

54

 

     Enrollment Period

56

 

     Medicare Part A

57

 

               Hospital Benefits, Part A Chart

58

 

     Home Health Care

59

 

     Hospice Care

61

 

     Nursing Home Care

62

 

                Skilled Nursing Home Benefits Chart

62

 

     Levels of Nursing Home Care

63

 

     Medicare Part B

64

 

               Medicaid

68

 

               Medicare Deductibles and Copayments

70

 

     Long-Term Care Insurance

72

 

               ADLs

76

 

               Terms

78

 

               Non-Tax Qualified Versus Tax Qualified (chart)

79

 

     Partnership Long Term Care Policies

82

 

     Making Benefit Choices

82

 

     Daily Benefit Options

83

 

     Determining Benefit Length

84

 

     Policy Structure

85

 

     Home Care Options

85

 

     Inflation Protection

85

 

     Simple & Compound Protection

86

 

         Required Rejection Forms

86

 

     Elimination Period in LTC Policies

86

 

     Policy Type

87

 

     Restoration of Policy Benefits

87

 

     Preexisting Period in Policies

88

 

     Prior Hospitalization Requirements for Skilled Care

88

 

     Deciding Between Federal Tax-Qualified or State Non-Tax Qualified Policies

88

 

     Nonforfeiture Values

89

 

     Waiver of Premium

90

 

     Unintentional Lapse in Policy

90

 

     Policy Renewal Features

91

 

     Items Not Covered by the LTC Policy

91

 

     Extension of Benefits

91

 

     Affordability of Contracts

91

 

     Standardized Definitions

92

 

     Minimum Partnership Requirements

92

 

     Benefit Duplication

92

 

     Partnership Publication

92

 

     Truly a Partnership

93

 

     Saving Assets from Medicaid Qualification

94

 

     Accessing Policy Benefits

94

 

     Asset Repositioning

96

 

     Partnership Participation does not Guarantee Medicaid Qualification

97

 

     Disability Insurance

97

 

     Types of Disability Policies

98

 

     Disability Policy Features

99

 

     How Many Benefits are Needed?

100

Chapter 4

Maintaining Financial Balance

101

 

     What Does Credit have to do with Insurance?

101

 

     FICO Scores

103

 

     Changing from Joint Credit to Single Credit

106

 

     Credit Cards

106

 

     Good Debt - Bad Debt

107

 

     Interest Works Both Ways

108

 

     Where To Begin

108

 

               Chart:  Short Term Goals

110

 

     Simple Record Keeping

111

 

     Financial Foundation

112

 

     The Agent’s Role

113

 

         Creating Organization

113

 

     Factoring In Age

114

 

     Investment Age Significance

115

 

     Managing Risk Through Insurance

116

 

     Insuring Health Care Requirements

118

 

     Financial Planners

119

 

     Determining New Living Costs

121

 

     Revaluating Investment Goals

122

Chapter 5

Protecting The Assets For Both

124

 

     Individual Retirement Accounts (IRA)

124

 

     Retirement Funds

124

 

     Defined Contribution Plans

125

 

     Defined Benefit Plans

125

 

     Keeping Credit Ratings Intact

127

 

     Small Businesses & Closely Held Corporations

127

 

     Remaining Impartial during a Difficult Time

128

Chapter 6

Building A Retirement

130

 

     After The Divorce

130

 

     Terminology

131

 

               Plan Participant

               Eligible Participant

               Plan Sponsor

               Summary Plan Description

               Accrual and Vesting

               Service Years (Years of Service)

               Breaks in Service

               Portability

               ERISA

               Qualified Plans

               Defined Benefit & Defined Contribution Plans

               Pensions

               401(k) Plans

               Simplified Employee Pension Plans (SEP)

               Keogh Plans

               Other Pension Options

               Plan Trust

               Pension Benefit Guaranty Corporation

               Fiduciaries

               Actuaries

131

131

131

131

132

133

133

134

134

134

135

135

135

136

136

136

136

136

137

137

 

     Retirement Benefit Claims

137

 

     Achieving Retirement Goals

139

 

     Legal Changes Aimed At Equality

143

 

     Pension Payments in Peril

143

 

     Pension Payment Mistakes

144

 

     Financial Independence

146

 

     Today’s Enjoyment Versus Tomorrow’s Security

147

 

     Social Security

147

 

     A Government Supplied Pension

148

 

               Chart:  Normal Retirement Age by Year of Birth

150

 

     Calculating Social Security Benefits

152

 

               Chart:  When there are 2 wage earners

153

 

     Starting Small

154

 

     Taxpayer Relief Act of 1997 & IRS Restructuring Act of 1998

156

 

     Roth IRAs

156

 

               Maximum Contributions

157

 

               Roth or Traditional IRAs?

157

 

               Catchup IRA Contributions

158

 

     Non-Qualified Distributions

158

 

               Contributions After Age 70½

158

 

               Roth IRA Advantages

159

 

     Educational IRAs

159

 

               Choosing Between a Coverdell IRA or a 529 Plan

160

 

               Differences Between a Coverdell ESA and a 529 Plan

160

 

               Funds not used for Education

161

 

               Choosing the Right Plan

161

 

               Using Both Plans

161

 

               Eligibility of Education IRA’s

161

 

     Pension Plans

163

 

               Pension Basics

163

 

               Defined Benefit Plans

163

 

                         Dollars per year of service

                         Career average salary plan

                         Final average salary plan

164

164

164

 

               Defined Contribution Plans

165

 

     Pension Plan Vesting

166

 

     Integrating Pensions With Social Security Benefits

166

 

               Chart:  Social Security Compensation

167

 

     Receiving Pension Benefits

167

 

     Choosing Pension Payment Options

168

 

               Form:  Excluding spouse from retirement benefits

169

 

     Pensions Must Last a Lifetime

171

 

     The Time Value of Money

172

 

     Paying Ourselves First

173

 

     Annuities As A Pension

174

 

     Keoghs For The Self-Employed

175

 

     Simplified Employee Pension Plans

176

 

     Life Insurance As A Pension

177

 

     Divorce Affects Retirement Benefits

178

 

     The Retirement Equity Act

179

 

     Qualified Joint & Survivor Annuities

180

 

     Qualified Pre-Retirement Survivor’s Annuity

181

 

     Prenuptial Agreements

181

Chapter 7

Staying Ethical

184

 

     Business Relationships

184

 

     Agent Ethics

185

 

     Ethics for Today

186

 

     Ethical Responsibility

187

 

     Caring For Others

188

 

     Ethics On The Job

190

 

     Education Requirements

190

 

     Accepting “No”

192

 

               Assertiveness versus aggressiveness

192

 

     Coping With Personal Failures

195

 

     Professional Standards

195

 

     Ethical Questions and Answers

196

 

     Professional Conduct

197

 

     Ethics In The Workplace

198

 

     Ethical Excellence

200

 

     Asking The Right Questions

201

 

     Listening Our Way To Success

202

 

     The Virtue of Patience

203

 

     Customer Satisfaction

204

 

     The Difficult Client

205

 

     Dealing With the Inevitable

206

 

     Using Positive Communication

206

 

     Family Obligations

207

 

     Acknowledging Free Choice

208

 

     Egoism (Psychological Egoism)

209

 

     Objectivist Theory

210

 

     Cultural Ethics; Perceptions of Ethics

211

 

     Moral Persuasion

213

 

     Rationalizing Morals

214

 

     Can Ethics Be Taught?

215

 

     A Moral Habit

216

 

     Violence In The Name Of Ethics

218

 

     The Addiction to Power

219

 

     Objective Morality

220

 

     Avoiding Negativity

222

 

     Who Is The Teacher?

224

 

     Are Manners Part of Ethics?

224

 

     Ethical Investing

225

 

     Investment Avoidance Approach

228

 

     Investing from a Positive Approach

228

 

     Investing from the Activist Approach

230

 

     Where does an Individual Begin Investing?

232

 

     Investment Portfolios

234

 

 

United Insurance Educators, Inc.

8213 352nd Street East

Eatonville, Washington 98328-8638

 

www.UIEce.com