Assignment 4:PROTECTING – INSURANCE AND ESTATE ANALYSIS

The annual enrollment period for Crystal’s employer has arrived and Crystal needs your help since the options have changed for the upcoming year. These new coverage amounts will replace the current insurance available through Crystal’s employer. Help Crystal determine if the insurance information provided in the Employee Benefits Package is adequate to meet their needs.

Where questions have a yes/no part please pick ONE answer only and justify that choice.

HEALTH INSURANCE

Crystal will use Primary Care Physicians and retail network pharmacies for all medical care needs. She will also use brand-name prescriptions only when there are no generic equivalents available.

  1. Evaluate (in Excel) the health insurance plans found in the case file.[1]Crystal is generally healthy except for the occasional injury, and she is a non-smoker. Last year (which was a representative year) Crystal had a general physical ($450) and went to the doctor 3 times for minor ailments ($65 per visit). Crystal also went to the emergency room once for a sprained wrist ($250). Crystal had X-rays ($200) but did not have to stay overnight. During the year, Crystal had 7 prescriptions filled at a walk in pharmacy (at an average cost of $55 per prescription); 4 of the prescriptions were generic, and the other 3 were brand name. The 4 generic prescriptions were short term and the three brand name ones were for the remainder of her life.[2][3]Crystal feels that this medical history is a good indicator of the upcoming year.
  2. How much would Crystal have to pay out-of-pocket for covered expenses for each plan (compare her current plan to the other option given in the employee benefits document)?
  1. What factors, other than out-of-pocket costs, should Crystal consider when choosing between the health insurance plans?[4][5]
  1. Considering your answers to question 1, which health insurance plan do you feel Crystal should choose? Why? How much would the premiums cost for this plan? How much would the premiums be if Crystal adds Bryson to this plan?

PROPERTY AND LIABILITY INSURANCE

  1. Crystal reviewed the insurance coverage and needsyour advice regarding risk exposure in the area of property and liability coverage.
  2. Crystal currently hasrenter’s insurance. Is the amount of insurance appropriate? Why or why not?
  3. As you know, Crystalis considering purchasing a new home and has somequestions regarding homeowners insurance.
  4. Should the home be insured at market value or replacement cost?
  5. What are the differences between homeowner’s and renter’s insurance?
  6. Are there consequences for underinsuring your home?
  7. What are some things that can be donein order to lower the homeowner’s insurance premium?
  1. Taking into account the risk tolerance, goals and current financial status:
  2. What recommendations can you give regarding the auto insurance policy?
  3. How can she keep this auto expense to a minimum and maintain sufficient coverage?
  4. Do you feel that Crystal needs to purchase an umbrella liability policy? If yes, why and how much do they need? If not, why and when should she reassess this decision?

DISABILITY INCOME INSURANCE

  1. Crystal’s employer offers disability income insurance as part of the employee benefit plan.
  2. Do you think that Crystal needs both short-term disability insurance and long-term disability insurance provided through the employer? How much would these plans cost?
  3. What if Crystal accumulated 27 days of paid sick leave, would the employer provided policy provide the disability income coverage Crystal needs?
  4. Sometimes there is a drop in benefits from Short-Term to Long-Term coverage. Why is this?

LIFE INSURANCE

  1. Crystal has a group life insurance policy available through the employee benefit plan. Crystal currently has a plan through the employer, but was wondering if it is sufficient.

a.Should Crystal obtain additional life insurance as part of her employee benefit package? If yes, how much insurance and what will it cost?[6] Can Crystal purchase enough life insurance through her employer to meet her needs or should she consider purchasing a private policy? If no, why and when should Crystal reassess her life insurance need?

  1. If Crystal were to buy life insurance, who do you suggest should be the beneficiary and why?

SUMMARY

  1. Review your recommendations given in Questions 1 through 7.
  2. Do you have any other suggestions? AreCrystal’s insurance needs adequately met based on your recommendations?
  3. What are the risk exposures that Crystal may face if she chooses not to implement your recommendations?

1

[1] The following link provides info regarding Crystal’s health insurance options available from UMC.

[2]https://www.depts.ttu.edu/hr/documents/CDHSeng.pdf

[3]https://www.depts.ttu.edu/hr/documents/HealthInEng.pdf

[4] https://www.depts.ttu.edu/hr/documents/Ratesheet-PY18.pdf

[5]

[6]