ISBN: 978-1-938130-16-8
Library of Congress Control Number: 2007931439
Circular 230 Notice The content in this publication is not intended or written to be used, and it cannot be used, for the purposes of avoiding U.S. tax penalties.
THE NATIONAL UNDERWRITER COMPANY
Copyright 2004, 2007
The National Underwriter Company
P.O. Box 14367
Cincinnati, Ohio 45250-0367
Second Edition
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the publisher.
Printed in the United States of America
DEDICATION
Darlene K. Chandler
To my husband, Bobby, with love and thanks
for his support and encouragement
David D. Thamann
to my first grandson, Liam King Thamann-Raines
ABOUT THE AUTHORS
Christine G. Barlow
Christine G. Barlow, CPCU, joined The National Underwriter Company in March 2006 as an assistant editor. She regularly researches, writes, and edits material for The FC&S Bulletins . She is a regular contributor to Claims Magazine. Before joining The National Underwriter Company, Ms. Barlow worked as a claims adjuster, personal lines underwriter, and personal lines supervisor. She earned a Bachelor of Arts degree from Towson University.
Darlene K. Chandler
Darlene K. Chandler is counsel for FBL Financial Group in West Des Moines, Iowa. Prior to joining FBL, Ms. Chandler was an editor with the National Underwriter Company contributing to Tax Facts 1 , the Advanced Sales Reference Service , and the Taxline newsletter. She has written several other books on life insurance and advanced market topics, including The Annuity Handbook, currently in its fourth edition. Additionally, Ms. Chandler serves as an associate editor for the Journal of Financial Service Professionals . Ms. Chandler received her law degree from the University of Cincinnati and is admitted to practice law in Ohio and Iowa. She holds the insurance industry designations of Chartered Life Underwriter (CLU) and Chartered Financial Consultant (ChFC) and maintains a registered principal license. Ms. Chandler lives in West Des Moines, Iowa, with her husband, Bob Schneider, and their son, James.
Kelly Maheu
Kelly Maheu, J.D., is a staff writer for The National Underwriter Companys FC&S bulletins. In 2000, Kelly earned a Bachelor of Arts degree from Miami University in Oxford, Ohio, with majors in English/Journalism and Psychology. She earned a law degree from the University of Cincinnati College of Law in 2004.
Prior to attending law school, Kelly worked as a claims representative for Progressive Insurance. She has also worked as a Legal Research Specialist at LexisNexis in Dayton, Ohio, and for several years worked on insurance defense, workers compensation and personal injury cases for a downtown Cincinnati law firm.
Susan Maloney
Susan Maloney has both insurance company and agency experience. She is an assistant editor with The National Underwriter Companys FC&S Bulletins . Before joining The National Underwriter Company, Susan worked in Regulatory Compliance and Research at Ohio Casualty Insurance Company and later in several independent insurance agencies as an Underwriter.
Susan L. Massmann
Susan L. Massmann, CPCU, is an assistant editor with The National Underwriter Companys FC&S Bulletins . Ms. Massmann specializes in commercial property and oversees FC&S Online . She contributes to a column entitled Claims Queue, which appears regularly in the National Underwriter Companys Claims magazine and co-wrote a publication on business income insurance as a supplement to the Commercial Property Coverage Guide. She earned a Bachelor of Arts degree from Evangel University and obtained a paralegal certificate from the American Instituted for Paralegal Studies.
Diana B. Reitz
Diana B. Reitz, CPCU, AAI, is director of the Property and Casualty Products, Professional Publishing Division, of the National Underwriter Company, publisher of FC&S Bulletins and FC&S Online. She specializes in analytical articles and books in risk management, alternative financing arrangements, commercial insurance coverage interpretation, and insurance business topics. A graduate of the University of Maryland, Ms. Reitz earned a Masters degree in human resource management from St. Francis College, Loretto, Pennsylvania. She completed the Council of Agents and Brokers (CIAB) Agency Management program at The Wharton School, University of Pennsylvania. She is a member of the Risk and Insurance Management Society (RIMS).
David D. Thamann
David D. Thamann, J.D., ARM, CPCU, is the managing editor of the FC&S Bulletins and has been an FC&S editor since 1987. Before joining The National Underwriter Company, he was a claims supervisor and senior underwriter for American Druggists Insurance Company, a commercial property lead underwriter for Transamerica Insurance, and a commercial package underwriter for CNA and Safeco Insurance companies. Mr. Thamann graduated from Salmon P. Chase College of Law and Xavier University. The publications he wrote or contributed to include Business Auto Coverage Guide , Personal Auto Coverage Guide , Workers Compensation Guide , and Commercial General Liability Supplement . Mr. Thamann also wrote an article on Employee Mental Disability Claims and Insurance for the Northern Kentucky Law Review , and he is a speaker or presenter at various insurance related seminars and meetings.
CONTRIBUTING AUTHOR
Michael Snowdon
Michael Snowdon is on the faculty of the College for Financial Planning, Greenwood Village, CO. His primary areas of concentration are the financial planning process, risk management and insurance planning. In this capacity, Michael has written and contributed to courses including: Financial Planning Process and Insurance (CFP 1), Foundations in Financial Planning (Registered Paraplanner), Accredited Asset Management Specialist, Accredited Wealth Management Advisor, Chartered Retirement Planning Counselor, CFP Code of Ethics, Retiree Health Care Issues, and Women & Financial Planning. Michael also conducts corporate training workshops and has contributed to several financial planning textbooks and articles. In addition to being a CFP certificant, Michael holds the Chartered Mutual Fund Counselor (CMFC) designation from the College for Financial Planning.
PREFACE
Risk Management for Financial Planners has been written to provide students with the most comprehensive information available as relates to the CFP Certification Examination. In combination with the Tools & Techniques of Life Insurance Planning , 100% of the CFP Certification Examination Topics List is covered, bringing the most thorough and complete coverage of risk management and insurance to the classroom to date. For professors, Risk Management for Financial Planners provides all the classroom aides and materials you need including an Instructor Manual, Test Bank, PowerPoint Slides, Correlation Table, and much more.
Risk Management for Financial Planners is the first book to present the fundamentals of risk management as a means to complement, benefit, and promote all areas of financial planning. With its focus on the basics of risk management, students will learn how the art of financial planning involves more than the core activities of making and growing a clients money, but also involves uncovering the means to protect their wealth, including:
