?This is what I wrote for the the tutor:

This is what I wrote for the the tutor:This is the presentation given by speaker and I’m require to write 2 papers as a report about it.Please try to summarize it in 2 papers.The powerpoint attached
riskmanagement03142018.pdf

Unformatted Attachment Preview

RISK MANAGEMENT
OF
LIFE
03/14/2018
Shunly Wang
Investment Advisor Representative
TRANSAMERICA FINANCIAL ADEVISORS, INC.
Responsibility & Wealth Risk
Live too long!
No Loans
No Mortgage
No Edu Expense
Not Enough $aving
Income
Mortgage
Credit Cards
Kid’s Education
Car/Student/Other Loans
Die too soon!
What’s The Solution?
RISK FACTOR
OPT
EF – Emergency Funds
EDU – Education Funds
RET – Retirement Funds
INS – Insurances
LTC – Long Term Care
RE/BIZ – Real Estates &
Business
MF – Mutual Funds
OPT – Options
VERY HIGH
STOCKS
BASIC
INVESTMENTS
FINANCIAL
FUNDATION
RE/BIZ
MF
HIGH
MID
(Sector Oriented Investment)
LOW
EF
EDU RET INS LTC
*** TAX BENEFITS ***
Financial Need = COA – EFC
Tuition
Fees
Housing and
Meals
Books &
School
Supplies
Personal
Transportation
& Expenses
Cost of Attendance (COA)
Parental
Contributions
(assets+income)/N
Student
Contributions
(assets+income)
Expected Family Contribution (EFC)
Includable
Assets & Income
Non-Includable
Assets & Income
A Real Case Study
AGI matters: $310,000(GI) => $220,000(AGI)
Asset allocation matters: Exposed 200K => Non-Exposed
Cost of Attendance:
Tuition
+ Room/Meal
+ Other Fee
Total
Financial Aid:
$ 44,854
$ 16,622
$ 2,571
School Scholarship
+ Grant
+ Work Eligibility
$8,200
$25,300
$3,500
$64,047
Total
$37,000
The parents only need to pay: $64,047 – $37,000 = $27,047
COA
FA
Out of pocket education expense
Qualified Plan
Social Security
Savings
Now the Social Security system is facing serious financial problems,
and action is needed soon ……
Without changes, in 2033 the Social Security Trust Fund will be able to pay
only about 77cents for each dollar of scheduled benefits.
Social Security was never intended to be your only source of income
when you retire. You also will need other savings, investments,
pensions or retirement accounts to make sure you have enough money
to live comfortably when you retire.
Reasons
• Medical Tech. / Longevity
• Baby boomer(1946-1964)
Social Security as Major Source of Retirement Income!
Source: Gallup
>50% of Americans Will Retire Broke!
Source: GOBankingRates
Why Aren’t Americans Saving for Retirement!
Source: GOBankingRates
Americans Regret Not Saving for Retirement!
Source: www.Bankrate.com
Aim to Have Saved for Retirement at Age Points:
By age 30 – aim to save 1x your salary.
By age 35 – aim to save 2x your salary.
By age 40 – aim to save 3x your salary.
By age 45 – aim to save 4x your salary.
By age 50 – aim to save 5x your salary.
By age 55 – aim to save 7x your salary.
By age 60 – aim to save 8x your salary.
By age 67 – aim to save 10x your salary.
Source: Fidelity Investments
Term
Life
Whole
Life
(1950’)
Cash
Value
3~4%
Universal
Life
(1979)
Flexibility
4~5%
Variable
Universal
Life
(1985)
9~10%
Index
Universal
Life
(1995)
7~9%
VUL
Invest in Mutual
Funds
IUL
Return
with Index
Floor & Cap
Provide Life Protection
TL
Temporary
Protection
WL
Permanent
Protection
Invest in Bonds
UL
Flexible
Premium
Death Benefit
Living Benefit
Insurances are upgradeable
like cellphones!
Term
Life
TL
Whole
Life
(1950’)
Cash
Value
3~4%
WL
Universal
Life
(1979)
Flexibility
4~5%
Variable
Universal
Life
(1985)
9~10%
Index
Universal
Life
(1995)
7~9%
UL
VUL
IUL
Insurances are upgradeable like cellphones!
Term
Life
TL
Whole
Life
(50’)
WL
Universal
Life
(1979)
Variable
Universal
Life
(1985)
Index
Universal
Life
(1995)
UL
VUL
IUL
Asset Allocations by Safety & Risk
A Challenge & Health Risk for Everyone!
Bathing??
Eating??
?
Continence?? Dressing??
Toileting?? Transferring??
Long-Term Care – Help To Perform Necessary
Activities of Daily Living(ADLs).
? Unable to perform 2 of 6 ADLs.
??????: ??,??,??, ??,
??,?????
? Cognitively Impaired, Dementia,
Alzheimer’s Or Even Mental &
Nervous Disorders. ????,??
???,?????????
For internal use only
1/1200
Home Fire
1/240
Major Auto Accident
4/10
Receiving LTC Between Ages 18 & 65
7/10
Needing LTC for Age 65 & Above
HOSPICE
NURSING
HOME
*More ADLs,
*Severe Cognitive
Impairment
ASSISTED LIVING
*Unable To Stay Independent
HOME CARE
*Early Cognitive Impairment
*First ADL Loss(es),
(Bathing, Continence, Dressing, Eating, Toileting, Transferring)
Long-Term Care Costs of New Jersey
Type of Services
(Rates)
Region
Rate Range
Maximum
Minimum
Median
Median
Annual
Rate
Five-Year
Annual
Growth
Homemaker
Hourly
Home Health Aide
Hourly
USA
$8
$20
$40
$44,616
2%
NJ
$11
$20
$26
$46,332
1%
USA
$8
$20
$40
$45,760
1%
NJ
$11
$21
$26
$48,506
1%
Adult Day Health Care
Daily
USA
$10
$69
$242
$17,904
3%
NJ
$69
$85
$115
$22,165
1%
USA
$600
$3,600
$11,250
$43,200
2%
NJ
$3,280
$5,725
$11,250
$68,700
4%
USA
$90
$220
$1,255
$80,300
4%
NJ
$231
$320
$426
$116,800
3%
USA
$101
$250
$1,255
$91,250
4%
NJ
$249
$350
$449
$127,750
3%
Assisted Living Facility
Monthly
(One Bedroom – Single
Occupancy)
Nursing Home
Daily
(Semi-Private Room)
Nursing Home
Daily
(Private Room)
(Source of Data – Genworth 2015 Cost of Care Survey)
LTC Cost Increase from 2016 to 2017:
• Benefits: $9.2 Billions (Increased 6.4%)!
• People on Claims: 295,000 (Increased 5.4% or 15,000)!
• Number of Insureds: 7.2 Millions!
• Average of Claims: $119,000!
Source: American Association for Long-Term Care Insurance
• 2/3 are female.
• Average age – 57.
• 1/3 over age 65.
• Families have a more difficult time in providing care today.
* Info from www.kfeducation.com
WOMEN ARE … :
?
2X as likely to file LTC claims!
Majority of nursing home & assisted living
patients.
?
2X as likely to exceed a 3-year
claim!
More likely to be on a LTC claim longer.
Women Live Longer!
•
• Super Rich People
People with Caring Children
• Super Poor People
• Top 10% Income – 55.1%
• Middle 50% ~ 90% Income – 38.5%
• Lower 1% ~ 50% Income – 6.5%
It’s your life, and you want to live it your way.
What if…
? You aren’t able to care for yourself?
? You face with providing care for a loved
one?
What would that do to the plans you’ve
made?
Myth …
?
?
?
No cure for … , so no need to plan.
? I’m too young to need LTC.
Fact …
People don’t plan to fail; they fail to plan!
Planning ahead always has real benefits for you &
your loved ones.
? Accidents & unfortunate events cause more LTC
needs than chronical illnesses.
* Info from www.longtermcare.org
Myth …
?
Medicare will pay for the costs.
Fact …
?
Pays 100 days of care with co-pay after 20 days.
?At least 3 consecutive days under treatment in hospital.
?Generally, skilled care only, not covers chronic care.
* Info from www.longtermcare.org
Myth …
Medicaid will pay for the costs.
Under Medicaid, my home is “exempt.”
?
?
Fact …
?
Proof of improverishment at time of claim.
? Assets must be less than $2,000.
? 5-Year look-back on assets.
? Options for care may be limited.
Eligibility criteria include a home equity limit.
States recoup LTC expenditures from beneficiary
estates.
?
?
* Info from www.longtermcare.org
Myth …
?
I can self-insure & save enough to cover the costs.
Fact …
?
<1/3 of age 50+ Americans have enough saving. ? Even if you have enough saving: ? What asset would you liquidate? ? Will the asset worth what is needed at claim time? ? Will the claim jeopardize your financial security? ? Even if it’s affordable, is it cost efficient? * Info from www.longtermcare.org * Info from Social Security Administration(2010) What do you have? What do you know about it? If You are stuck in the middle! It will affect your entire family! ASSET PROTECTION Car - Auto Insurance Home - Homeowner’s Insurance Family - Life Insurance Income - Disability Insurance Health - Medical Insurance Retirement - Long-Term Care Insurance May Help You: ? Protect your financial goals ? Protect your life savings ? Protect the plans you’ve made Let You Live Your Life Your Way! LTC Stand alone LTC Don’t use it. Waste it! Hybrid: Life Ins + LTC Cash Value + LTC + Protection Thank You! ... Purchase answer to see full attachment