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Newsletter

2010 1st Edition (Other Editions)

SAMPLE of RISK MANAGEMENT MEMO

There are varieties of risk exposures that we all face. Some are more significant than others are. Some are quite remote in the likelihood of their occurrence, but are nevertheless, very serious in consequences. The purpose of this Risk Management Memo is to arrange these exposures in a convenient format for your review and direction.

DISABILITY EXPOSURE

A disability raises four economic issues: loss of earnings, loss of contributions to qualified retirement plans, lifestyle expenses increase and naturally, more medical bills. The latter is normally considered a medical insurance exposure.

We consider your disability exposure to be: _____

Based on our report, recommendations, and discussions, there are several choices for you:

SURVIVOR INCOME EXPOSURE

Family responsibilities do not cease at death for those who feel a responsibility to provide a certain standard of living for their survivors. We have analyzed your current economic circumstances, insurance coverage's and your stated objectives.

We consider your survivorship exposure to be: _____

Based on your review of our report, our discussions, and your desires, there are several choices for you:

MEDICAL EXPENSE EXPOSURE

Medical exposures, in this era of transplants, bypasses, and joint reconstruction, can be staggering. Coverage is evaluated on two factors - the breadth of coverage and the maximum amount of "out-of-pocket" exposure for the insured. We have reviewed your present coverage based on the information you submitted.

We feel your medical coverage is: _____

Based on our discussions and your personal evaluation of the extent of exposure, current medical insurance opportunities and your cash flow, you have several options:

ESTATE LIQUIDITY EXPENSES

Estate expenses may include probate fees, legal costs, debt liquidation and the reserves required to fund specific responsibilities such as education. Of course, assets can be liquidated, but that may entail additional costs. Our analysis included a hypothetical probate - a measurement of the expenses and liquid capital that will be available.

We consider your estate liquidity: _____

There are only five choices if the numerical summary indicates a significant shortage.

  1. Do nothing - assume or ignore this risk.
  2. Liquidate assets to provide more liquidity.
  3. Reduce your expectations or estate wishes.
  4. Increase insurance coverage to provide liquidity.
  5. Postpone action/decision until: _____.

BASIC PROPERTY & CASUALTY EXPOSURES

Part of exposure is natural hazards such as the damages caused by fire, flood, earthquake, typhoon, etc. Others are man-made such as burglary, traffic accidents and various aspects of product failures and malpractice. Your assets are exposed to these hazards, as is your future income. We have reviewed your circumstances as well as the information you furnished on your coverages.

We suggest that your coverage be: _____

There are several courses of action for you to consider:

EXTENDED LIABILITY EXPOSURE

Basic homeowner and tenant policies provide only a small amount of liability protection. Auto policies have larger limits, but still much less than the amounts for which lawsuits are being filed. The courts and juries are awarding judgments on the basis that "someone has been harmed, and someone should pay" rather than the issues of fault and reasonable benefit. A judgment more than basic coverage could wipe out your financial security.

We consider your liability coverage: _____

There are only two solutions for liability - adequate insurance coverage and moving your assets outside the reach of the court through gifts and offshore trusts. We believe you should consider the following:

SUMMARY

Our responsibility is to bring these issues to your attention and to encourage you to arrive at decisions. It may be impractical to deal with all issues at this time. After considering our analysis and the above comments, please check the appropriate items and return a copy in the enclosed envelope.

COMMENTS & QUESTIONS

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Received, completed and returned:

By: ________________________________________________ Date: ________ (Your signature)