NAVIPLAN PREMIUM LEARNING GUIDE. Existing insurance coverage

Transcription

1 NAVIPLAN PREMIUM LEARNING GUIDE Existing insurance cverage

2 Cntents Existing insurance cverage 1 Learning bjectives 1 NaviPlan planning stages 1 Client case 2 Enter yur clients existing life, disability, and lng-term care insurance plicies 3 Insurance Cverage page 3 Life Insurance Details dialg bx Details tab 4 Life Insurance Details dialg bx Future Values tab 5 Disability Insurance Details dialg bx 6 Lng-term Care Insurance Details dialg bx 7 Review utput t verify the accuracy f the plicies 8 Insurance Plicy Summary reprt 8 Describe NaviPlan assumptins fr life, disability, and lng-term care insurance 9 Life insurance assumptins 9 Disability insurance assumptins 9 Lng-term care insurance assumptins 9 Exercises 11 Exercise questins 11 Cnclusin 12 Answers t exercise questins 13 NaviPlan Premium resurces 14 i

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4 NaviPlan Premium Resurces Existing insurance cverage This mdule assumes that yu have cmpleted the Start planning mdule (available at supprt.eisi.cm/naviplan) and that yu already knw hw t create a client file. This mdule was created using the Average Tax methd. The Existing insurance cverage mdule will help yu capture yur clients existing life, disability, and lng-term care insurance plicies and verify the accuracy f input using reprts. Learning bjectives Upn successful cmpletin f this mdule, yu will be able t Enter yur clients existing life, disability, and lng-term care insurance plicies. Review utput t verify the accuracy f the plicies. Describe NaviPlan assumptins fr life, disability, and lng-term care insurance. Nte: Each learning bjective is identified with a puzzle piece icn. NaviPlan planning stages The fllwing diagram shws the planning stages yu can fllw in NaviPlan, frm creating a client file t presenting results. The learning bjectives in this mdule are part f the Enter financial data stage. 1

5 NaviPlan Premium Learning Guide: Existing insurance cverage Client case This mdule includes practice exercises using ne f the sample clients prvided in NaviPlan. The exercises have been designed specifically fr this mdule and assume that yu are wrking with the riginal data in the plan named Base Plan in the Dixn, Jim & Maria client file. Thrughut the mdule, we will be using this client file as an example. Fr example, yur new clients, Jim and Maria Dixn, have tld yu that they bth have existing life and disability insurance plicies thrugh wrk. Jim has lng-term care insurance as well. T accurately reflect their financial situatin, yu will need t include this infrmatin in their financial plan. Here is an example f a reprt yu might shw yur clients nce yu have entered their data.. Figure 1: Reprts menu Insurance Life Insurance Insurance Plicy Summary Insurance Plicy Summary reprt 2

6 NaviPlan Premium Resurces Enter yur clients existing life, disability, and lng-term care insurance plicies Yu can enter initial data fr each f these plicy types n the Insurance Cverage page. Clicking the Details buttn pens the applicable Insurance Details dialg bx where yu can enter mre detailed data, such as the plicy wner, cash surrender value, and ther plicy and premium assumptins. Fr faster data entry, yu can enter the main data n the Insurance Cverage page, and then mve n t the Set Gals sectin. Hwever, t understand the underlying assumptins that will be used, review the details in the applicable Insurance Details dialg bx first. Insurance Cverage page NaviPlan creates default entries fr life, disability, and lng-term care insurance plicies n the Insurance Cverage page. Figure 2: Enter Financial Data sectin Insurance Cverage categry Insurance Cverage page In the next few pages, we will examine the fllwing: A. Life Insurance Details dialg bx Details tab B. Life Insurance Details dialg bx Future Values tab C. Disability Insurance Details dialg bx D. Lng-term Care Insurance Details dialg bx 3

7 NaviPlan Premium Learning Guide: Existing insurance cverage Life Insurance Details dialg bx Details tab Figure 3: Enter Financial Data sectin Insurance Cverage categry Insurance Cverage page Details buttn Life Insurance Details dialg bx Details tab Key pints All life insurance types cntinue until the insured persn dies r the Cease Cverage On Date event r date is reached. Using the Direct Residual Prceeds T list, yu can specify where the prceeds f the plicy shuld be allcated when the plicy is paid ut. If the prceeds are directed t cash flw, the funds are used t cver expenses. Any excess is invested int a system-generated asset called Invested Available Capital that earns the rate f return assigned fr cash flw surpluses and liquidatins. If the prceeds are directed t an existing r t a new nn-qualified accunt, yu can enter r mdify the details fr that accunt by clicking the Accunt Details buttn. If a dependent r Other is selected as the beneficiary, the Direct Residual Prceeds T list is inaccessible because prceeds are directed utside the plan and never cme int cash flw. T enter events as dates, use the Event Calendar in the date fields. Premium payments paid by the client r c-client are autmatically remved frm cash flw. If premiums are paid by the emplyer, yu can ensure the funds are nt taken frm cash flw but are still tracked by selecting Other frm the Payer list under Premiums. 4

8 NaviPlan Premium Resurces Life Insurance Details dialg bx Future Values tab Figure 4: Life Insurance Details dialg bx Future Values tab Key pints On the Future Values tab, yu can verride the mdal premium, death benefit, and estimated CSV amunts by selecting the Mdify the Calculated Values check bx, and then ding ne f the fllwing: Enter the benefit values manually. Calculate the revised values using the fields under Fill Values. T calculate revised values, select an ptin frm the Clumn t Fill list, enter data in all applicable fields, and then click Fill. The fields are ppulated with the revised values. 5

9 NaviPlan Premium Learning Guide: Existing insurance cverage Disability Insurance Details dialg bx Figure 5: Enter Financial Data sectin Insurance Cverage categry Insurance Cverage page Details buttn Disability Insurance Details dialg bx Key pints Premiums are frmtaken ut f cash flw autmatically, except when Other is selected as the premium payer. Under Benefit Details, yu can calculate the benefits based n a percentage f salary r as a flat dllar amunt, and apply indexatin assumptins. Selecting the Taxable Benefit check bx indicates that the insured s benefits are subject t incme tax. Selecting the Offset by Scial Sec check bx indicates that disability insurance plicy benefits will be ffset by Scial Security disability benefits. If yu select this check bx when disability benefits are already entered in the Scial Security Details dialg bx, a warning message appears recmmending that yu clear the Offset by Scial Sec check bx t avid verstating incme. If yu selected the Client(s) are already retired check bx when yu created the plan, disability incme gals cannt be analyzed. Only the Premiums (treated as an expense) frm any disability insurance plicies yu enter will apply t the plan. 6

10 NaviPlan Premium Resurces Lng-term Care Insurance Details dialg bx Figure 6: Enter Financial Data sectin Insurance Cverage categry Insurance Cverage page Details buttn Lng-term Care Insurance Details dialg bx Key pints Benefits fr a lng-term care insurance plicy are specified as a daily amunt instead f mnthly r annually. Under Benefits Payable, yu can apply a different index rate t the benefit befre the benefit pays ut, as well as after the payut begins. At the end f the lng-term care benefit perid, NaviPlan assumes the client is deceased. T navigate between previusly entered plicies withut clsing the dialg bx Click the Previus Entry r Next Entry buttn. 7

11 NaviPlan Premium Learning Guide: Existing insurance cverage Review utput t verify the accuracy f the plicies The Insurance Plicy Summary reprt prvides yu with a summary f all the plicies entered n the Insurance Cverage page. The infrmatin entered in the applicable Insurance Details dialg bx fr each plicy als appears in the reprt. The Insurance Plicy Summary reprt is ideal fr verifying data and ensuring that the plicies have been entered accurately. Insurance Plicy Summary reprt Figure 7: Insurance Plicy Summary reprt (Reprts menu Insurance Life Insurance Insurance Plicy Summary) Nte: Clicking the Insurance Cverage Reprt buttn n the Insurance Cverage page generates a similar reprt. 8

12 NaviPlan Premium Resurces Describe NaviPlan assumptins fr life, disability, and lng-term care insurance Belw are NaviPlan s key default life, disability, and lng-term care insurance plicy assumptins. Life insurance assumptins Analysis can be perfrmed fr the client, c-client, r bth clients. When an analysis is dne fr bth clients, NaviPlan assumes that bth die at the same time. Fr reprting purpses, NaviPlan assumes that analysis begins (that is, the client is deceased) n December 31 in the current plan year. The analysis perid ends n December 31 (if the analysis was perfrmed fr bth clients, bth are assumed t die at the same time). Disability insurance assumptins Analysis can be perfrmed fr the client r the c-client (nt bth). NaviPlan assumes that the client s r c-client s disability begins January 1, in the year fllwing the plan year. NaviPlan assumes the current plan year s inflws and utflws (such as cash flw, taxatin, and savings) ccur as expected. The analysis perid ends at retirement; hwever, the end date can be mdified. When Scial Security disability benefits end, Scial Security retirement benefits begin. If yu selected the Client(s)are already retired check bx when yu created the plan, disability incme gals cannt be analyzed. Lng-term care insurance assumptins Analysis can be perfrmed fr the client r the c-client (nt bth). NaviPlan assumes that the lng-term care analysis begins January 1, the year the client r c-client reaches the age f 80. The analysis perid ends fur years later n December 31 (fur years after the lng-term care analysis began). The lng-term care analysis perid can be mdified. 9

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14 NaviPlan Premium Resurces Exercises The exercises in this mdule were created using the Jim and Maria Dixn client file. Befre starting the exercises, g t the Client Management sectin Client List categry Clients page, and then pen the Dixn, Jim & Maria client file. On the Plans page that pens, duplicate the plan named Base Plan, rename the duplicate with a meaningful name, and then use the duplicated plan t cmplete the fllwing exercises. Exercise questins 1. Jim s emplyer has decided nt t renew the cmpany s grup term life insurance, which expires at the end f the mnth. As an ptin, Jim can cnvert his grup term cverage int an individual plicy r purchase a new individual whle life plicy. Jim ultimately decides t purchase a whle life plicy. Jim will make an initial depsit t the CSV when the plicy is purchased. Yu estimate that the balance f the CSV will be $3,000 at the start f next year with an annual grwth rate f 4%. Hw wuld yu mdel this scenari in Jim and Maria s financial plan? The plicy details fr the whle life insurance plicy include the fllwing (maintain defaults fr any fields nt specified): Beneficiary: Maria Benefit: $300,000 Premiums: $140/mnth Cash Surrender Value: $3,000 CSV Payable with Death Benefit: Yes 2. Since yu made changes t the Dixns life insurance plicy details, generate the Insurance Plicy Summary reprt t cnfirm that yur entries are crrect befre analyzing the Dixns insurance needs. 11

15 NaviPlan Premium Learning Guide: Existing insurance cverage Cnclusin Upn successful cmpletin f this mdule, yu are nw able t Enter yur clients existing life, disability, and lng-term care insurance plicies. Review utput t verify the accuracy f the plicies. Describe NaviPlan assumptins fr life, disability, and lng-term care insurance. 12

16 NaviPlan Premium Resurces Answers t exercise questins 1. On the Enter Financial Data sectin Insurance Cverage categry Insurance Cverage page, yu wuld click the Details buttn t mdify Jim s grup insurance as fllws: Edit the life insurance plicy details. On the Details tab fr the existing term plicy, edit the fllwing fields t change the plicy t a whle life plicy: Plicy Type: Whle Life Death Benefit: $300,000 Cash Surrender Value: $3,000 CSV Payable with Death Benefit check bx: selected Amunt: $140 Frequency: Mnthly Nte: Leave all ther fields at their default settings. Edit the cash surrender value grwth rate. On the Future Values tab fr the new whle life insurance plicy, enter the fllwing changes t ensure the estimated CSV increases each year: Select the Mdify the Calculated Values check bx. Frm the Clumn t Fill list, select the Estimated CSV ptin. Leave the Start Year and End Year default values. In the Start Value field, enter $3,000. In the Base Rate field, enter 4%. In the Perid (years) field, enter 1. Click the Fill buttn. Click OK. 2. G t the Reprts menu, and then select Insurance Life Insurance Insurance Plicy Summary. 13