Financial Planning Objectives
Goals of the financial planning process as follows:
- Standard of Living Maslow's basic needs satisfied such as food, water, clothing, shelter, and nice-to-have discretionary items, such as automobiles, vacations, entertainment.
- Savings emergency funds for sudden and unexpected events, such as extra living expenses because of a fire at one's home.
- Protection DISABILITY INCOME INSURANCE; HEALTH INSURANCE; LIFE INSURANCE; PROPERTY AND LIABILITY INSURANCE (all forms designed to offer coverage against the uncertainty of a financial loss due to the PURE RISK).
- . Investment Accumulation of wealth through the return on assets deployed leading to financial independence.
- Estate Planning distribution of the invested assets held for the purpose of the accumulation of wealth in a tax efficient and effective manner.
Popular Insurance Terms
Expense of soliciting and placing new insurance business on a company's books. It includes agent's commissions, underwriting expenses, medical and credit report fees, and marketing support ...
Table charting relative costs of a group of cash value life insurance policies derived by using the net cost method of comparing costs (traditional net cost method of comparing costs; net ...
Mechanism used by a fidelity and surety insurance company to spread its liability through reinsurance by issuing a surplus treaty as a first layer of coverage, thereby enabling a cedent to ...
process of discovering sources of loss concerning the liability risk faced by individuals and business firms. The first step in risk management is to identify the causes of a loss by ...
Amount of the loss absorbed by an insurance company after deducting any reinsurance applicable to the loss, as well as subrogation and ABANDONMENT AND SALVAGE rights. ...
Formula for a given line of insurance used by property and casualty insurance companies to compare losses and loss adjustment expense with premiums. This shows the amount of each premium ...
Maximum amount of insurance that an insurance company will issue on a particular risk exposure. This limit is used by the insurance company to avoid having to pay for a loss on the exposure ...
Fund that comes into existence because premiums for ordinary life insurance policies in their early years are higher than necessary for the pure cost of protection. These excess premiums, ...
Coverage for an insured firm if its business debtors fail to pay their obligations. The insured firm can be a manufacturer or a service organization but it cannot sell its products or ...
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