Abstract
In broad terms, insurance is a form of risk management. While there are myriad types of insurable risks, the authors focus on those personal risks that most commonly can disrupt or devastate individual and, by extension, family financial planning. Those risks are associated with health, life, property, and personal liability for negligent acts or omissions. The authors discuss key concepts and definitions related to insurance and then explore how best to analyze and utilize the following forms of insurance: health insurance, including through COBRA; disability insurance; life insurance, including term insurance and permanent insurance; long-term-care insurance; and property and casualty insurance, including personal excess liability and umbrella insurance.
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Notes
- 1.
See “Health Plans & Benefits: Continuation of Health Coverage—COBRA,” The United States Department of Labor, accessed June 4, 2018, https://www.dol.gov/general/topic/health-plans/cobra.
- 2.
See “Preferred Provider Organization (PPO),” U.S. Centers for Medicare & Medicaid Services, accessed June 4, 2018, https://www.healthcare.gov/glossary/preferred-provider-organization-PPO/.
- 3.
See “Health Maintenance Organization (HMO),” U.S. Centers for Medicare & Medicaid Services, accessed June 4, 2018, https://www.healthcare.gov/glossary/health-maintenance-organization-HMO/.
- 4.
See “FAQs on COBRA Continuation Health Coverage,” The United States Department of Labor, accessed June 4, 2018, https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-consumer.pdf.
- 5.
See “Employer Shared Responsibility Provisions,” Internal Revenue Service, accessed June 4, 2018, https://www.irs.gov/affordable-care-act/employers/employer-shared-responsibility-provisions.
- 6.
See “Don’t Miss the Health Insurance Deduction if You’re Self-Employed,” Internal Revenue Service, accessed June 4, 2018, https://www.irs.gov/newsroom/dont-miss-the-health-insurance-deduction-if-youre-self-employed.
- 7.
See I.R.C. §§ 104 and 105.
- 8.
See “Benefits for People with Disabilities,” Social Security Association, accessed June 4, 2018, https://www.ssa.gov/disability.
- 9.
See I.R.C. § 7702.
- 10.
According to the Social Security Administration, in 2017, the probability of an individual worker experiencing a disability before normal retirement age is 26.8%. The probability of death while never disabled before normal retirement age is only 6.1%. See https://www.ssa.gov/oact/NOTES/ran6/an2017-6.pdf.
- 11.
See Ellen Stark, “Long-Term-Care Insurance Gets a Makeover,” Consumer Reports, published August 31, 2017, https://www.consumerreports.org/long-term-care-insurance/long-term-care-insurance-gets-a-makeover/.
- 12.
See “Cost of Care,” Genworth, accessed June 4, 2018, https://www.genworth.com/services/servlets/pdf/CostofCare_2017.
- 13.
See Stark.
- 14.
See “Directors and Officers Insurance,” Insurance Information Institute, accessed June 4, 2018, https://www.iii.org/article/directors-and-officers-insurance.
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Nathanson, M.J. et al. (2018). Managing Some of Life’s Great Risks Through Insurance. In: Personal Financial Planning for Executives and Entrepreneurs. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98416-2_11
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DOI: https://doi.org/10.1007/978-3-319-98416-2_11
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