Math

Protecting Your Wealth

Gary’s company updates its benefit package annually. During this open enrollment time, employees have the option to upgrade or make changes to their insurance and benefit coverage. To help the employees understand the programs being offered, the company has brought in several insurance consultants to explain the different policies and how each policy could benefit the employees. While listening to the consultants, Gary decides to look into his auto and life insurance policies.

Gary mentions that he is generally happy with the HMO insurance plan he has through the technology company where he works. However, Gary also mentions that he does not particularly like to see his primary care physician each time he requires a consultation with a specialist. He tells you that his company also offers a PPO, but he did not choose that plan because he knows so little about PPOs.

Gary becomes concerned about his auto insurance after hearing a co-worker recently had his car totaled by an uninsured motorist. Gary has not looked at his auto insurance policy since he purchased it two years ago. Gary discovers that selecting insurance coverage is harder than he originally anticipated.

Gary’s current policy covers just the basics at the minimum required levels allowed by law. There are so many types of insurance that he becomes confused and needs some advice. Recall that Gary is 25 years old, has a driving record that contains several speeding tickets, a couple of parking tickets and two accidents (one of which he caused). Gary realizes that adding coverage will increase the cost of his auto insurance. Therefore, he is thinking about switching auto insurance companies to a less expensive carrier. The agent notices that Gary commutes 17 miles to work. The agent mentions in passing that Gary could save $200 in insurance payments if his commute to work was 12 miles or less. This gets Gary to thinking about saving in other areas. Less mileage means less gas; he could save a tank of gas per month if he moved closer to where he works. Moving is a lot of work, and he likes where he lives now.

When you ask Gary whether he has renter's insurance, it is obvious that he does not know what renter's insurance is.

Gary is trying to decide between term life insurance, universal life and whole life insurance. He likes whole life insurance, and he believes that the loan feature on that policy will give him an option for meeting his liquidity needs.

Gary Grandview Part 4 Reading Segment Revised 3.6.2013 – SL_ML_SL2