Perform a personal risk assessment on yourself (and your family where applicable). Identify your areas of personal risk, assess your current risk readiness, and identify any steps needed to better manage that risk.
In this paper, you put yourself in the role of a Personal Financial Planner. After assessing your own personal situation, what advice should a Financial Planner give you? What should be considered in forming your Risk Mitigation plans? What options are available to you, which options should a Financial Planner suggest, and why? What options do you wish to avoid and why? What are your next steps in improving your risk mitigation?
If others are reliant upon you for support in any way, your analysis should include risk management techniques to meet their needs if something were to happen to you.
If you are reliant upon others for support in any way (parents, spouse, etc), your analysis should also include a risk assessment of those upon whom you rely.
Analyze your risk as it exists currently, and outline a plan for the next 5 years based on your expected life changes between now and then.
(If you are not comfortable profiling yourself, I can provide a sample risk profile of a generic client that you may use instead.)
Expectations of Risk Assessment:
9-10 pages of content (double-spaced, 10 or 12 pt font, normal margins), with additional appendix of any screen shots or reference materials used.
Risk assessment should include both personal and property risks.
Your analysis should assess the strengths and weaknesses of your risk management that is currently in place, and make suggestions for improvement and action steps.
Some items to include:
Description of your current and expected future life status and risk situation for the next 5 years. This would be the type of background information that a good financial planner would gather from you to formulate a plan.
Discuss options and identify methods to protect your and your family in the event of sudden loss of life or catastrophic hardship (ie disability). Be sure to address temporary and permanent needs. In addition, include any social insurance payments.
Discuss feasible options to provide property and liability coverage to protect your assets. Explain what protections you identify as the most ideal, and any changes that you need to put into place as a result. This plan should include umbrella coverage.
Discuss retirement funding needs: Identify feasible options and select at least two methods of funding retirement, and also address any social insurance.
Identify financial risks if costly medical treatment is needed for yourself or your family member. Discuss health insurance coverage and available options to protect your finances such as HSA, HRA or savings. Ensure you have a strong risk mitigation plan for the risk of poor health or accident, including non-medical ancillary costs.
– Where insurance is used in your plan, make sure to include the approximate cost of each coverage and the amount of coverage. Cite your sources for each coverage/costing.
– Remember strong AMBest Ratings are important as you select insurers
– Refer to NAIC Consumer Complaint data and/or other measures of insured satisfaction as you select insurers
Risk Assessment Paper Grading Criteria
25% = Risk of Premature Death / Life Insurance
Description of current risk situation in regards to the risk of premature death, including your death as well as the death of anyone you or your family rely upon.
Appropriate calculation of life insurance needs
Identify at least two feasible options available to address this risk, and explain pros/cons of each
Identify any riders that you considered and explain what you are and are not including in your plan
Selection of appropriate life insurance product(s), addressing temporary and permanent needs, and rationale for this selection
Cost, amount of coverage, and sources
Discussion of social insurance
20% = Risk of Loss of Ability to earn a living / Disability Insurance
Description of current status in regards to the risk of disablement
Discuss the use of insurance or other risk mitigation methods to address temporary and permanent needs, for both short and long disabilities
Discussion of social insurance
Cost, amount of coverage, and sources
25% = Liability & Property Risk
Description of current risk situation in regards to liability & property risk, including home/rental, auto, and liability.
Assess the strengths and weakness of your current risk mitigation plan for both property and liability, for your risk and the risk of anyone you rely upon.
Develop an appropriate plan for liability and property coverage to protect your assets and identify next steps to improve your current risk situation
Include discussions of options such as actual cash value, replacement, comprehensive or collision, and other choices available to you under home/auto
Explain why you elected the amount and type of coverage you chose
Your analysis should include discussion of umbrella policy
Cost, amount of coverage and sources
15% = Retirement Funding Needs
Discuss some options for funding your retirement
Include discussion of the pros & cons on annuities, and explain your choice to use them or not in your retirement planning right now
Using a retirement or annuity calculator, estimate how much you will need to have saved to find your retirement later
Discussion of social insurance
15% = Health Insurance
Discuss insurance that is already in place (if any) and make suggestions to strengthen this if needed
Discuss options available to fund deductibles and out of pocket expenses, and suggest appropriate methods to protect finances. Include a discussion of HSAs, HRAs, and/or saving mechanisms.
Assess the strengths and weakness of your current risk mitigation plan (for your risk, the risk of anyone who relies upon you, and the risk of anyone you rely upon.)
Explain what action steps you suggest for improvement of risk mitigation
Address the non-direct, ancillary costs of medical care (i.e. transportation, hotels, meals, loss of ability to work (due to your own health or caring for others, childcare, etc.) and put a plan in place to miti
