Introduction to Personal Finance Unit 7 Project Learning Goals: ▪ Understand the concept of protection and how it relate

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Introduction To Personal Finance Unit 7 Project Learning Goals Understand The Concept Of Protection And How It Relate 1 (86.09 KiB) Viewed 34 times

Introduction to Personal Finance Unit 7 Project Learning Goals: ▪ Understand the concept of protection and how it relates to risk and risk management. Understand the role of insurance in protecting human, financial, and property assets. ▪ Understand the importance of basic estate planning documents. Don and Kasey Johnson are a married couple. They are both 30 years old and they have a 3-year-old girl. Don is a loan officer and earns $75,000 a year. Kasey works as a retail store manager and earns $45,000 a year. Don's life expectancy is 80 years and Kasey is 82. They plan on retiring when they are 65. There are three health insurance policies that they could choose from (see page 3-5). 1. Health Insurance: a. Help Don and Kasey to determine which of the three plans to choose. They want to know which plan would be best if they estimate their medical costs at approximately $2,500 per year and which plan to use if they estimate their medical costs closer to $25,000 per year. Help the Johnsons determine how much of their risk they should transfer and how much they should retain (for example a higher deductible means they are retaining more risk). Low Medical Expenses (-$2,500/year) High Medial Expenses (-$25,000/year) Estimated FirstCare Bronze Medical Blue Choice FirstCare Gold FirstCare FirstCare Blue Choice Bronze Gold Gold Cost: Gold Out of Pocket Expenses: Annual Premium: Total Cost: Which plan should they choose? And Why? b. Now suppose you are choosing the insurance for yourself. Based on your own situation, what is your annual medical cost and which insurance are you going to choose based on your family, history, lifestyle, etc.? Why? 2. Life Insurance: a. What type of life insurances the Johnsons get? Term Life Insurance Cash-Value b. Explain your reasoning with evidence from the course materials: a. What type of disability insurance should the Johnsons get? Disability Insurance Coverage for Don: Disability Insurance Coverage for Kasey: Short Term Short Term b. Explain your reasoning with evidence from the course materials: a. Should the Johnsons get long-term care insurance? □ Yes b. Explain your reasoning with evidence from the course materials: 3. Disability Insurance: 4. Long-Term Care Insurance: Whole Life Insurance Long Term Long Term □ None None None □ No