Joe and Lisa White are a married couple. Joe is 63 and Lisa is 61. Joe is thinking about retiring in a few years, and the Whites have come to you for…

A replacement cost coverage endorsement is in place

The Whites’ two cars are insured under a personal automobile policy with split limit coverage of 250,000/500,000/50,000. They also have a $1 million excess liability policy.

Health insurance

The Whites are covered under Lisa’s group health insurance plan. The traditional plan has a lifetime maximum benefit equal to $5 million for the family, a $500 per person deductible, and an 80% coinsurance clause, with the family stop-loss limit of $2,500.

Using this information, please answer the following questions.

1. In preparation for retirement, Joe is exploring his Social Security and Medicare insurance coverage. He is concerned about whether or not the following benefits would be covered by Medicare:

1A. Hospice benefits for terminally ill persons.

1B. A stop-loss limit for annual medical expenses in excess of $2,500.

1C. Coverage for custodial care.

1D. Coverage for nonprescription drugs.

If Joe retires next year, would he receive any of the above benefits? What benefits should he expect to receive from Medicare?

What advice would you give Joe concerning health care costs in retirement?

2. Joe is considering purchasing a 15-year-old pickup truck for use when he goes hunting. The truck that he has his eye on has 100,000 miles but is in generally good condition.

What advice would you give Joe concerning insurance for this truck? Should he include: liability coverage? Medical payments coverage? Uninsured motorist coverage? Comprehensive? Collision? Justify each option.

Which of the following insurance coverages should Joe probably exclude when purchasing an insurance policy for this truck?  Justify your answer.

2A. Liability coverage.

2B. Medical payments coverage.

2C. Uninsured motorist coverage

2D. Damage to insured’s auto coverage.

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