Fundamentals of Insurance Planning and Risk Management Assignment

Fundamentals of Insurance Planning and Risk Management - Assignment Example Life insurance needs to be purchased for an amount that takes all expenses into consideration. It is estimated that life insurance will be required for an amount of $1,025,000. Following calculation sheds light on this figure: 75% of consolidated income is required for 14 years for a reason as noted above. University expenses are calculated for 4 years for both Mike and Karen. It is assumed that before the university, expenses will be managed from the family maintenance fund. According to the needs approach, when calculating expenses, it is best to overestimate needs a little. The idea is to buy and pay for a little more insurance than to underestimate and realize mistake when it is too late. The particular product that may meet the requirement to close the gap should be bought. Insurance consultants can be contacted for assistance in this matter to learn which product will be the most appropriate from a cost-benefit perspective. Long-term care insurance: Long-term care is typically needed by the elderly, but it is also required by anyone with a debilitating illness or injury who needs assistance to perform activities of daily living (ADLs) like bathing, feeding, and getting dressed (Beam, Wiening, Bickelhaupt 2005). Long-term care insurance ensures that any costs associated with care are covered, thereby lessening the financial burden on oneself and family.