ADMS 4501 Lecture Notes - Variable Universal Life Insurance, Asset Allocation, Vehicle Insurance

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Adms 4501 winter 2012 lois king. Lecture 2 chapter 2 the asset allocation decision jan 12. Life insurance: providing death benefits and, possibly, additional cash values: term life and whole life insurance, universal and variable life insurance. Non-life insurance: health insurance & disability insurance, automobile insurance & home/rental insurance. Cash reserve: to meet emergency needs, equal to six months living expenses. Accumulation phase: early to middle years of working career. Consolidation phase: past midpoint of careers. Specifies investment goals and acceptable risk levels. Policy statement: focus: investor"s short-term and long-term needs, familiarity with capital market history, and expectations. Examine current and projected financial, economic, political and social conditions: focus: short-term and intermediate-term expected conditions to use in constructing a specific portfolio. Implement the plan by constructing the portfolio: focus: meet the investor"s needs at minimum risk levels. Feedback loop: monitor and update investor needs, environmental conditions, evaluate portfolio performance.

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