 Personal Finance PowerPoint Presentation. Personal Insurance Plan Overview. Get ready to get financially fit by practicing personal finance. We've been breaking our financial decisions into two main categories, those being the short-term decisions and the long-term decisions. The short-term decisions being those where we're going to train our gut to trust our gut. We're going to hone down our habits so we can depend on our habits to help make the day-to-day decisions with less cognitive thought. We're going to use trial and error, a tinkering type of method to help to hone down those habits. When we're looking at the long-term types of financial decisions, then we don't have the same kind of tools. We can't train our gut to trust our gut. We can't use the same tinkering and trial and error methods because these are decisions that don't come up as readily and they're going to have longer impacts out into the future. Therefore, we use a more formal strategy. We try to put a formal structure in. We follow the adage of measure twice cut once with that kind of strategy. When we look at our insurance policies and plans and our risk assessment strategies, there could be a little of both with our overall risk assessment in terms of trying to hone down our habits with regards to our personal behaviors for things like eating well and exercising and that kind of stuff to lower our risk. And then when we pull in the insurance into the process, we're typically looking at something that we would have to group more on that long-term strategy kind of thing because it's another one of those areas where we human beings aren't that good at measuring the risk assessment there. In other words, we as human beings are pretty good at dealing with what is in front of us at this point in time. If something happens, even if it's a catastrophe, we're pretty good at measuring the assessment at that point in time and taking steps to work through it at that point. But we're not as good at trying to measure what could possibly happen out into the future, especially if that possibility is longer out into the future. We're not as good at being able to look at things which are less likely to happen. But if we're to happen, we'd have a significant financial impact on us. So that's why we're going to need kind of a more formal plan with regards to the insurance plan process. So we might be able to say also that if I look at these long-term risks and how I can mitigate those risks, that might be another factor that we can use to hone down our habits to do things like treat ourselves better and eat better and that kind of stuff to lower the risk. But when we look at the insurance plans, then we're typically going through that more formal process. And with any kind of more formal decision, we generally have a similar kind of series of steps which will look something like this. We're going to set our goals. So with regards to insurance, one of our major goals is of course to mitigate risk. So we want to get into details as we've been talking about, about what kinds of risks are there, how can we categorize those risks, how can we start to mitigate those risks, and where does insurance basically fit in the plan for us to do so. So we're going to set the goals and then number two, we're going to develop a plan to reach the goals. So clearly once we have the goals set and we know what we're looking for, then we're going to put the plan together and put it into place. And number three, put your plan into action. So after we've gone through the formal process of putting the plan together, then of course we're going to implement the plan. And then number four, we're going to review the results of the plan. Now this can be a little bit difficult with the insurance policies, of course, because you're paying for something to mitigate risk for something that hopefully isn't going to happen often time. And if the event doesn't happen, you might review the plan and say, I'm just throwing the money out the window. But of course you are paying for something. You're paying to mitigate the risk. So every time you're looking back at the insurance, you've got to take into consideration the fact that you are receiving something. The question is, are you receiving something worth the value that you are given with regards to the mitigation of the risk? Meaning you don't want to get in the car accident. The fact that you didn't get in the car accident doesn't mean that it was wasted money to pay for the car insurance because you paid for the car insurance to mitigate the event that it could possibly happen that you got into the accident. So you did still kind of receive something that can be a little bit difficult to mull over in reviews. You got to keep that in mind when you're going over the review process. And then of course once we review it, then we can set the goals again. We can do some more comparing and contrasting of our different insurance policies, our risk strategies, and so on and so forth. And then reset the goal on a periodic basis, possibly once a year or something like that or when an event takes place. So number one, generally we're going to set the insurance goals to reduce possible loss of income due to premature death, illness, accidents, or unemployment. So we'll get into more of these types of insurance as we go forward. But it's a good idea just to get a general idea of insurance as a whole. And then we'll start thinking about these types of things. And notice again, when we look at these types of things, clearly we're not going to be able to pay for insurance to stop us from dying or illness and the pain that's going to be involved with those possibilities that could happen. But we can ensure against the financial loss in the event that those types of things happen. And we'll go into each of those in a bit more detail in future presentation. It could be property caused by perils. So property and it could be income savings and property due to personal negligence. So these are the kind of things that we're taking into consideration with our plan, which we'll dive into each of them in more detail in the future. Number two, develop a plan to reach your goals. What do you need to ensure? So clearly when we're thinking about our plan, we might think about, well, I mean, if we're talking about medical conditions or injury or stuff, we might say, I'm going to do some habits. I'm going to eat better. I'm not going to walk down that alley in the dark that basically people get robbed like twice a week or something over there at three o'clock in the morning and stuff like that. So those are kind of things that we can kind of train ourselves to do from an avoidance standpoint or a mitigation standpoint. But then we can think about what kind of insurance policies we can put into play, which is, of course, where our major focus is here. How much should you ensure for it? This is a tough question because this is the kind of thing that they're into the future. We don't know if these losses are going to happen. How much coverage do we need to cover it? That's where the weeds are. That's where it gets confusing. And that's where we'll dive into a bit more detail in each of these in future presentation. What kind of insurance should you buy? So of course, you got some standard insurance policies that you probably come to mind at this point in time to ensure for particular things. We'll dive into some of those in more detail. Who should you buy insurance from? Now, of course, big question in terms of who's going to be the provider because when you buy insurance, you got to make sure you trust the insurance company because you're giving them the money upfront in the event that they're going to pay you back contingent upon some event happening in the future. So what you don't want to have happen would be you pay them upfront. The event happens and they don't pay you for the promise. The insurance company goes away or something like that at that point in time. That wouldn't be good. We got to trust the insurance company. So you want to have a reputable insurance company. Number three, put your plan into action. So obviously, once we have our plan, once we know what kind of insurance we want, who we're going to be doing business with, then we're going to go through the insurance process on that. And then number four, check your results. Insurance needs and goals change. So clearly, if you're insured at an earlier point in life, your insurance needs will differ as time passes. So you want to make sure that you update your insurance plan from time to time. And when you do so, you're doing so with a fresh mind as you go back into it and you're not just looking at your budget going, look at all this money that I'm paying for insurance. It's worthless. I didn't get an accident last year. I'm just going to cancel the policy. You know, you probably want to go through the whole thing and say, okay, is the risk that I'm paying for here worth it at this stage in my life and what I'm doing at this particular time and so on and so forth and possibly talk to, of course, professionals to help you out with that kind of plan, noting that when you do talk to professionals, if you're just talking to insurance companies and insurance brokers, they have they have an interest of financial interest and you buy in the plan. So they're invested in it. You probably want to talk to someone independent like friends, family, possibly a CPA or something like that or a professional financial planner who's not being paid for you to buy the insurance, but is being paid to give you advice on whether you should buy the insurance. There's a big difference in terms of where their particular financial interest would be. Now, this is our table just to review the personal events, which could be like disability, illness, death, retirement, property laws, liability, the financial impacts involved, the personal resources, and then the private and public sector resources that might be available, including various kinds of insurance plans, which we'll dive into in future presentations.