Life Insurance is something that will take care of them ..

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LIFE INSURANCE

• CERTAINTY DURING UNCERTAIN TIMES

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INSURANCE

• Form of risk management primarily used to hedge
  against the risk of a contingent loss
• Equitable transfer of the risk of a loss, from
  one entity to another, in exchange for a premium
• Guaranteed small loss to prevent a large,
  possibly catastrophic loss

3
INSURANCE

• RISK MANAGEMENT practice of appraising and
  controlling risks
• INSURANCE BUSINESS MODEL Insurers earn through
  Underwriting ( process by which risks are
  selected and premiums are decided) and Investing
  (earning on float)

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INSURANCE

• UNDERWRITING Actuarial Science uses statistics
  and probability to analyze the risks with the
  range of perils
• INVESTING Earning from the money on hand that
  has been accepted as premium payments but hasnt
  been paid out as claims

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LIFE INSURANCE

• Only thing certain during uncertain times
• Policy contract binds the insurer to the insured
  on an agreed amount of protection that will be
  realized upon an agreed event provided that that
  insured keeps his end of the contract pay the
  premiums
• The only investment that does not rely on time
  and is there SELF-COMPLETING.

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LIFE INSURANCE

• Role of the Life Insurance Agent
• Identify the needs of the client
• Evaluate the options
• Encourage the client to purchase sufficient and
  appropriate insurance protection
• Help minimize the risk of client

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LIFE INSURANCE

• Why should I buy life insurance when I can save
  regularly?
• Saving money is like taking the stairs when you
  can take the elevator ( when you buy LIFE
  INSURANCE) !

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LIFE INSURANCE

• Why should I buy life insurance when I have a
  business that can take care of my family?
• A business is something to take care of.
• ( needs skills expertise to run, worries about
  profits losses, time away from family other
  pursuits, etc.)

9
LIFE INSURANCE

• A business is something to take care of
• Life Insurance is something that will take care
  of them
• Life Insurance substitutes CERTAINTY for
  uncertainty

10
LIFE INSURANCE

• After the insured passes the underwriting
  requirements and is accepted by the insurer, the
  RISK is passed on to the insurer in exchange for
  a premium obligation from the insured
• RISK - Dying too soon
• - Living too long

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LIFE INSURANCE

• 2 Sources of Income
• Man-at-Work
• vs
• Capital-at-Work

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LIFE INSURANCE

• MAN-at-WORK earn from salaries, bonuses,
  commissions, profits from business, etc.
• CAPITAL-at-WORK earn interest income, rental
  income, dividend income, other investment income
• Through LIFE INSURANCE, once Man-at-Work steps
  out of the picture, MONEY-at-WORK steps in to
  fill the gap.

13
LIFE INSURANCE

• Identify the need What is the risk being
  addressed? How much is needed to cover the risk?
• Evaluate the options What financial instrument
  can cover the risk? If life insurance, what type?

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LIFE INSURANCE

• Help client purchase sufficient and appropriate
  insurance protection How much is client willing
  to pay? For how long?
• Help minimize the risk of heavy financial loss
  Explain the reason why a guaranteed small loss (
  fixed premium payment over a fixed period of
  time) to prevent a large, devastating loss (
  death/disability of a breadwinner, outliving your
  retirement)

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LIFE INSURANCE

• People are looking for GUARANTEES safe, secure
  form of protecting themselves against loss
• As such, Life Insurance is never considered an
  Investment (chance of losing and winning)
• Investment risk is shared by the insured (
  choice of investment product)