Lastly… I handed the “Insurance coverage Planning” course for my College of Georgia Self-Paced CFP class. That’s solely #2 out of the 7 subjects, however listed below are just a few fast observations thus far:
- After attempting a few instances… 😅 I used to be not in a position to move the course exams with out finding out the course supplies first. You want 80% right to move, and I’d be within the 60% to 80% vary with none finding out.
- I’ve been in a position to move the exams after solely studying the web course slides and evaluation questions. I haven’t opened the textbooks as soon as (as proven in pristine situation above!), regardless that I spent further for the bodily textbooks (versus electronic-only).
- As a private finance geek, I did know a whole lot of the fabric beforehand, however there are undoubtedly new bits that I’m studying right here and there. The fabric is dry, however it covers a whole lot of subjects.
- Like many different skilled certification exams, a lot of passing means finding out particularly for the check. The questions aren’t essentially weighted by what’s generally utilized in monetary planning apply, however by what’s best to check in a multiple-choice format. Which means memorizing formulation that require a monetary calculator, “not one of the above”, “all the above”-type questions, and minor variations in definitions. I now perceive why even after finishing this instructional course requirement, most CFP candidates join one other ~$1,000 “cram course” that simply drills you on pattern check questions.
Again to Insurance coverage Planning. I acquired caught on this course for whereas as it’s a very broad subject with some quite uninteresting subjects, so here’s a high-level overview of what was coated.
Three important classes of “Pure Danger” for people and households:
- Private
- Property
- Legal responsibility
Rules and Objective of Insurance coverage
- Varieties of danger (pure vs. speculative)
- Strategies of managing danger (avoidance, discount, retention, switch)
Property and Casualty Insurance coverage
- Owners and renters insurance coverage
- Auto insurance coverage
- Legal responsibility and umbrella insurance policies
- Enterprise-related protection
Life Insurance coverage
- Varieties (time period, complete, common, variable)
- Suitability and desires evaluation
- Coverage choice, riders, beneficiary designations
Well being Insurance coverage and Incapacity Insurance coverage
- Well being plans (PPO, HMO, HDHP, and many others.)
- Medicare and Medicaid
- Social Safety
- Incapacity protection (short-term, long-term, personal vs. any occupation)
- Lengthy-Time period Care Insurance coverage
Worker and Group Advantages
- Group life, well being, and incapacity plans
- COBRA and continuation protection
- Cafeteria and versatile spending accounts
Annuities
- Varieties (mounted, variable, fast, deferred)
- Payout choices and ensures
- Tax remedy and suitability
Function of a monetary planner.
- Protection degree willpower
- Assist shoppers establish protection gaps or excesses.
- Refer shoppers to certified Property & Casualty (P&C) brokers.
- Consider insurance coverage as a part of a broader monetary plan.
- Overview and replace over time
For instance, for private legal responsibility insurance coverage you’ll ask about:
- Private Auto Coverage (PAP): For motor vehicle-related liabilities.
- Owners Coverage: Covers bodily damage/property injury to others.
- Complete Private Legal responsibility (CPL) Coverage: Standalone legal responsibility protection.
- Umbrella Coverage: Broad, high-limit coverage supplementing present coverages.
You might not want all of them individually, however some mixture of those ought to work collectively to verify there no holes. It’s additionally attainable that you’ll have duplicate protection or in any other case too a lot insurance coverage.
A whole lot of monetary recommendation focuses on “offense”: maximizing revenue, minimizing bills, and optimizing investments. However “protection” is simply as necessary, because it contains defending from lack of future revenue and lack of present belongings.