Title: Life
1Lifes Greatest Risks
- An Introduction to Insurance
- Mil Grauer
2Why Purchase Insurance?
- In the next hour
- 194 people will be injured in car accidents
- 57 homes will catch fire
- 230 people will die
- 1,027 people will become disabled
- How can you as an individual plan ahead in order
to protect yourself against these things that you
potentially have no control over?
3Life Insurance
Cause of Death Probability
Motor Vehicle Accident 1 in 100
Homicide 1 in 300
Fire 1 in 800
Firearms Accident 1 in 2,500
Electrocution 1 in 5,000
Asteroid/Comet Impact 1 in 20,000
Passenger Aircraft Crash 1 in 20,000
Flood 1 in 30,000
Tornado 1 in 60,000
Venomous bite or sting 1 in 100,000
Fireworks Accident 1 in 1 million
- Provides financial assistance in your absence
- Helps pay for funeral costs
- Provides an income for your family
4Cumulative Death Table numbers are out of 1000
people per year at the specified age.
Age in 1990 Total U.S. White Male White Female Black Male Black Female
25 11.52 11.39 7.62 26.85 17.57
35 14.71 15.38 9.08 35.97 21.5
45 20.02 21.57 12.09 50.82 28.75
55 31.03 34.21 19.73 74.7 42.91
65 55.52 63.37 38.37 111.67 69.53
5Disability Insurance
- Ensures that when a working person is ill or
disabled and unable to work, he or she will still
receive a monthly income - Savings are often insufficient
Age (year) Probability ()
25 45
30 42
35 41
40 39
45 36
50 33
55 27
Age at Onset of Disability Recovered () Died () Still Disabled ()
25 44.1 9.7 46.2
35 34.0 12.3 53.7
45 21.5 19.9 58.6
55 11.8 28.5 59.7
6Fire Insurance
- Fire is a very real threat that can destroy your
home and possessions - Fire is the largest single cause of property loss
in the United States - In the last decade, fires have caused direct
losses of more than 120 billion and countless
billions more in related costs. - 12 out of every 100,000 homes burn down every year
7Automobile Insurance
- Automobile accidents are common due to the number
of vehicles on the road - Even if you are careful, drivers around you may
not be as safe - 1,163 out of 100,000 vehicles are involved in
Bodily Injury Claims annually - 3,846 out of 100,000 vehicles are involved in
Property Damage Claims annually
8Auto Insurance Rates
- The average cost of car insurance nation wide is
1368.18
Most Expensive Cites for Auto Insurance Most Expensive Cites for Auto Insurance Most Expensive Cites for Auto Insurance
Ranking City Average Auto Premium
1 Detroit, MI 5,162
2 Philadelphia, PA 4,142
3 Newark, NJ 3,482
4 Los Angeles, CA 3,225
5 New York City, NY 3,127
Least Expensive Cities for Auto Insurance Least Expensive Cities for Auto Insurance Least Expensive Cities for Auto Insurance
Ranking City Average Auto Premium
1 Roanoke, VA 758
2 Wapakoneta, OH 871
3 Chattanooga, TN 911
4 Green Bay, WI 948
5 Raleigh, NC 949
9Liability Insurance
- A liability lawsuit can completely deplete all of
your wealth - Especially important for companies since a loss
could cause bankruptcy - Also known as third party insurance
- It is not uncommon for liability claims to be in
the ballpark of 1-10 million!
10Long Term Care Insurance
- To protect against the high costs a family can
incur from placing a family member in a LTC
facility - On average, LTC costs 7,000 a month, or about
84,000 a year - For a person 65 years old, there is a 44 chance
that they will be disabled for 90 days or longer
and require LTC - Over 5 million individuals between the ages of 18
and 64 needed LTC last year
11Risk of Living Too Long
- Compared to earlier generations, our population
as a whole is starting to live longer - Life expectancy for a person who reaches the age
of 65 - Female 19.5 years left
- Male 16.6 years left
- By saving early though you can avoid this risk by
maximizing the benefit of compounding interest.
12Health Insurance
- People get sick -- Its just a fact of life
- 1.7 trillion was spent in 2003 on health care
costs that is 5,671 per person - The average annual growth rate in inpatient
expenditures per health plan member is 5.9 - Cost of hospital stay varies greatly from 52
above the national average in New Jersey to -38
below the national average in Maryland.
13Homeowner Insurance
- The typical homeowner policies covers property
damage as well as liability issues that may arise
as a result of owning property - 7,330 out of 100,000 homeowner policies file
claims each year - 5,082 is the average severity of a homeowners
claim
14Percent of Losses Incurred on Homeowners Policies
Type of Damage/Year 2000 2001 2002 2003 2004
Property Damage
Fire, Lightning, Debris Removal 32.82 31.03 32.72 32.92 22.49
Wind and Hail 20.45 21.69 20.81 25.56 48.61
Water Damage, Freezing, Mold 22.6 22.14 21.71 22.01 16.62
Theft 4.91 4.65 4.53 3.29 2.35
Other Property Damage, (Vandalism and Mischief) 11.63 13.11 12.23 10.62 6.01
Liability
Bodily Injury and Property Damage 6.43 6.47 7.00 5.29 3.17
Medical Payments 1.13 0.88 0.98 0.94 0.74
Credit Card Fraud (forgery and counterfeit currency) 0.03 0.03 0.01 0.00 0.00
- 84 of claim costs are from property damage, only
4 are from liability suits, and remaining 12
are from settling costs.
15Questions?