Question

o   Life Insurance Policies – Tara’s ex-spouse purchased a $100,000 term life insurance policy five years ago that had Tara named as beneficiary. Tara has a $50,000 group term life insurance policy from her employer. Tara is the insured and the owner of the policy.

o   Health Insurance Policy – Tara has employer-provided health insurance. The family annual deductible is $250, coinsurance is 80/20, and the family out-of-pocket stop loss is $1,000. The lifetime cap of the policy is $1M per person.

o   Homeowners Insurance – Tara has a HO-2 policy for $100,000. The personal property coverage is $50,000, and the personal liability is for $100,000. There are no separate endorsements.

o   Auto Insurance – Tara has a personal auto policy with bodily injury and property damage of 100/300/100. The deductible is $250. She does not have any uninsured motorist coverage.

o   Umbrella Liability Insurance – there are no other liability insurance other than the liability covered in the homeowners policy.

Managing catastrophic risk is a critical issue in any strategic-planning activity. In your work you will rely on risk-management assumptions in order to determine Tara’s needs; those needs are then compared to current coverages, and the comparison helps you understand current weaknesses and gaps.

Question: Describe in four or five sentences the insurance-related assumptions you will use in determining Tara’s needs?

Answer 1

1. Law: Negligence doctrine used in defense to a personal injury suit. It reduces the amount, or bars the recovery, of damages by an aggrieved party on the grounds that he or she acted with actual or inferable knowledge (see constructive knowledge) of the hazard that caused the injury.
2. Risk management: Practice of absorbing minor losses (such as due to petty larceny) but protecting against catastrophic losses (such as due to robbery or fire) by buying insurance cover. Also called assumption of risk.

Life insurance helps to protect you, your family and your lifestyle if something happens to take away your earning power.

The Insurance needs calculator will use some personal details and some financial details to help you work out how much death, total and permanent disablement (TPD), trauma and income protection insurance you may need.

The data you provide within this Insurance needs calculator will be used solely for the purpose of producing the calculated cover and will not be used for any other purpose.