Cuban Revolution Essay Example | Topics and Well Written Essays - 1000 words

Cuban Revolution - Essay Example The Cuban Revolution immediately won the support of the masses and, indeed, the revolutionary leaders' popularity only increased, and expanded to include Latin American populations, as a result of political rhetoric which emphasised Cuban independence from US domination and the imperatives of adopting socialism to improve the socio-economic status of the majority (Sweig, 2004). Indeed, in assessing the causes of the Cuban Revolution and the reasons for its success, it is important to highlight the political and economic background. Politically, Cuba, as was the case with Latin American nations in general, had little autonomy and independence from Spain had not led to full-fledged sovereignty but to domination by the United States. Economically, the majority suffered from chronic and absolute poverty while a minority commanded and owned much of the nation's wealth and resources. The fact that the Cuban Revolution was motivated by the aforementioned conditions and determined their reve rsal ensured its popularity in both Cuba and Latin America. Indeed, the majority of the Cuban populace embraced Castro and his guerrillas, who appeared as young idealists. As rebel soldiers made their way to Havana they were welcomed as conquering heroes by throngs of local villagers who lined the roads and cheered the troops as they passed (Sweig, 2004). Proceeding from the above stated, it is evident that the United States' policies towards Cuba are among the most significant of the revolution's causes. Before 1959 the history of U.S.-Cuban relations played out in the context of U.S. hegemony over the island. Though previous administrations had resisted U.S. influence, few had rejected it outright (Perez-Stable, 1998). Indeed, throughout the history of U.S.-Cuban relations the Cuban elite, those of European origin whose wealth tied them to U.S. interests, had actively welcomed U.S. dominance. Thus, Cubans themselves, especially the elite class, together with U.S. policymakers were responsible for stifling Cuban nationalism and for providing the atmosphere in which the revolutionary government of Fidel Castro fundamentally changed the course of Cuban history and of Cuban-U.S. relations (Perez-Stable, 1998). Before Castro, U.S. officials had worked closely with Cuban leaders. Prior to the U.S. intervention in the Cuban War for Independence many Cubans actively sought U.S. rule. The Cuban elite feared the establishment of a truly democratic republic, or in their words, a Negro Republic (Perez-Stable, 1998). They played on U.S. racial fears and cultural stereotypes, marginalizing their own countrymen. The United States wanted to maintain the status quo and unfettered access to the Cuban economy; the Cuban elites wanted stability and to continue to reap the financial rewards of close ties with U.S. business interests. The Cuban elite also wanted power for themselves. Hence, after Spain surrendered to the United States, some members of the Cuban elite embraced U.S. control over their nation (Perez-Stable,

Juvenile Waivers Essay Example | Topics and Well Written Essays - 500 words - 1

Juvenile Waivers - Essay Example They were treated as juveniles. Special psychological treatments were given o them. Juvenile homes make every effort to turn them into responsible citizens. The main reason for children committing crimes is the domestic violence. Another reason is hardcore video games and movies containing this sort of acts. According to some voluntary organizations dedicated to drug and alcohol de-addiction, in the last few years' lots of youngsters have started approaching them. They also say that drug addicts start taking drugs at 13 or 14, but only come to the rehab centers when the situation becomes grim or out of control. This is because they start taking drugs recreationally and by the time they start having problems and decide to seek help it takes time. Unlike social drinking which doesn't affect one's lifestyle, there is nothing like social drugs because substances like cocaine and heroin are very addictive and illegal. The problem arises because most youngsters believe they won't get addicted not realizing that with drugs like cocaine and heroin it's very easy o get hooked on. And when they get addicted the trouble starts to unfold and slowly indulging in criminal offences comes into the picture. Independent courts act separate from other courts and are found in Connecticut Rhode Island and Utah. States like Alabama doesn't have independent and separate courts.

Response paper Essay Example | Topics and Well Written Essays - 500 words - 2

Response paper - Essay Example Although the demise of the Aztec empire opened up the New World for European settlers, it is a tragic event when seen from the viewpoint of the natives. Their millennia long indigenous culture and civilization was abruptly and most violently cut short by the foreign conquest. In my opinion, rather than merely being a historical fact, this tragic facet to this historical episode should serve as a warning for contemporary politicians and policymakers, and make them realize that greedy ventures lead to humanitarian losses. I would like them to understand that while Spain and later European contingencies benefited from this conquest, from broader perspective humanity was the loser. Another aspect of the book I was most impressed with is its objectivity. Although author Miguel Leon-Portilla was trained in western scholarly tradition, his analysis and presentation does not betray this fact. At the same time, the empathy shown toward the disadvantaged Aztecs is matter of fact and not melodramatic. In this regard I like the subaltern approach adopted by the author in constructing history. I appreciate this book for features such as these. The extensive research conducted by the author is also quite impressive. Not only did he peruse primary sources for gathering evidence (which are in indigenous Aztec language), he also gives numerous cross references for further study, which is useful for college students like me. The detailed list of bibliographical entries at the end of the book is another handy feature. As I read through the book, I was able to appreciate the effort that went into researching this book. For example, previous to this work there was scarce scholarship on pre-Columbian culture in Mexico and the Americas. This book fills that void that its value cannot be overstated. The author also succeeds in bringing lots

Successful person interview Essay Example | Topics and Well Written Essays - 1000 words

Successful person interview - Essay Example He goes on to add that there has been a general misconception concerning work, that placing family in a place of importance in one’s life hinders their growth in terms of career. He states that when family is in the right place in one’s life, they are happy and content thereby proving a good working environment for them and support whenever it is necessary. This view, is in live with one of Carvey’s 7 habits of highly effective people that states that they must be able to put first things first. He further explains the concept by looking at his life, stating that even before he became a diplomat, he was already a successful man. He explains how his nomination took place, stating that he did not apply for the job, rather his qualifications and diligence put him in a position of recognition and thereby the appointment, what he called the elevation. When asked what he did to be successful, he failed to answer that question, saying that it purported the wrong idea that he was working towards success, rather, he corrected it, to why he was successful. To this, he answered that he was successful because he had applied himself to wisdom and diligence in his work, choosing integrity over corruption and excelling in the little things he did thus achieving success way before anyone thought him to be successful. He further added that he chose to take the high road that involved tough times and hard days of work, persistence in doing what was right and above all prayer. Further asked whether he was a religious man, he said that he was not, rather he was a Christian. Interested in what would cause a man to make such bold statements, I asked him whether he truly believed that his Christianity had anything to do with his success. To this, he answered that it did not have anything with it; rather, it had everything to do with it. He added that even if he knew that that downplayed his role in his success, it did not matter because, it was the truth. He

Organizational Behavior Essay Example for Free

Organizational Behavior Essay 1. Does this case prove economic downturns and company layoffs fail to lead to workplace malfeasance? Why or why not? This case proves economic downturns and company layoffs lead to workplace malfeasance. According to dictionary.com malfeasance is the performance by a public official of an act that is legally unjustified, harmful, or contrary to law. It is also defined as wrongdoing (used especially of an act in violation of a public trust. According to the case incident â€Å"These companies often produce press releases, which then work their way into the media and presumably generate potential clients for the organizations† (Robbins Judge, 2010, pg. 35). This statement has led me to believe that companies use press releases to make their situation seem worse than it actually is in order to gain clients for their organization. 2. Does the case prove we can learn nothing from the business press? The case proves that we can learn something from the business press however we should not believe everything we read. According to the case, â€Å"MSN Money, under the headline â€Å"Businesses See Rise in Employee Theft,† reported the poll results as follows: â€Å"When asked if they had noticed a recent rise in monetary theft among employees, such as fraudulent transactions or missing cash, 18% said yes, 41% were unsure and the rest said they hadn’t† (Robbins Judge, 2010, pg. 35). However, put a different way 18% agreed that theft was up and 82% either disagreed or weren’t sure. Based on MSN Money’s report it sounds like theft really has increased however if you look at it another way most companies said they haven’t seen an increase or they just haven’t noticed a rise in theft. 3. Does this chapter provide any clues for how you can be an informed consumer of business news on OB issues? In some way’s this chapter provides clues for how you can be an informed consumer of business news on OB issues because it explains how managers stay informed. According to the text, â€Å"All managers, to some degree, collect information from outside organizations and institutions, typically by scanning the news media (including the internet) and talking with other people to learn of changes in the public’s tastes, what competitors may be planning, and the like† (Robbins Judge, 2010, pg. 6). 4. Some companies install surveillance equipment (cameras, computer software) to monitor their employees. Valenti Management, which owns and runs 117 Wendy’s and 17 Chili’s restaurants, has installed fingerprint scanners on all its cash registers. Do you think these measures infringe too much on individual privacy? Can a company take prevention too far? How do you strike a balance between prevention and intrusion? When you become an employee of a company you have in essence agreed to the monitoring that is taking place. Although fingerprint scanners on all cash registers sounds like pretty extreme measure it is a way for the company to be sure that the employee that is supposed to be working the register is actually the one working the register. If the company uses a clock in number such as the four digits of an employee’s social security number another employee could use that number, take money from the register and then the blame would go on the wrong person. I do believe a company can take prevention to far however, I don’t believe Valenti Management has done so in this case. Striking a balance between prevention and intrusion can be very difficult however I do believe it is possible, before a company implements a new prevention measure it should determine whether the measure is absolutely necessary to prevent employee theft.

Office Practicum Essay Example for Free

Office Practicum Essay The ladder of success is best climbed by stepping on the rungs of opportunity.† -Ayn Rand In every game, in order for you to win, you must finish all the levels. You can’t reach the 9th level without taking the 1st, the 2nd up to the 8th. The first year of my college life had passed. The first semester of S.Y. 2011-2012 had ended. And the next level is the second semester which covered the on-the-job training. As a BBTE student, it is part of our curriculum to pass the 6-unit subject, Office Practicum to go to the next level. I became a student trainee of the Dean’s Office of the college of Education of this University. I considered this training as a game and I took nine levels before I declared myself as a winner. The first level is the easiest level of all. This just a preparation for me. Preparing for the requirements and thinking where is the place I want to be trained. When everything is alright, and I’ve decided where the place would be, the second level approached me. Actually, I’ve chosen Department of Environment and Natural Resources (DENR) as my training ground, but they neglected me. I went to different offices of PUP, from OVPPA, OEVP, OVPA, Registrar’s Office, etc. But, misfortune hit me, I experienced rejections. â€Å"Well, it’s their regret that they let me get by another office.† (Pampalubag-loob.. ï Å ) Until I saw the key shining on the front of the door located at the North Wing, 2nd Floor—Dean’s office of CoEd. I got the key and I heard a voice saying, â€Å"Level Accomplished! Go to the next level!† As I enter the door, I saw the gems that can help me to gain a higher score for this game. They are Ma’am Fe, Ma’am Menchie, Ma’am Junie and Ma’am Ruby. They welcomed me so warmly and I appreciated it so much. This level is all about appreciation and I’m ready to face the next level because of enthusiasm they gave me. In the 4th level, I met the soldiers that can be companions to the following level. They are Marlo, Jediah and Cris. I am happy to be with them. I am also thankful to have them especially in facing the 5th level. This level is one of the hardest and tiresome level of all. It’s all about the task—administrative duties like answering telephone calls, encoding, filing, etc. In facing the 6th to 9th level, task is always there. And through the help of the soldiers, I’ve passed the last four remaining levels. In all games, sometimes you will play alone. Just like in the office, sometimes you will work alone. So, you must initiate to be productive. Initiative and self-esteem is the main power to pass this level. As what Lydia M. Child said, â€Å"Belief in oneself is one of the most important bricks in building any successful venture.† Sometimes, we experienced twists and turns. No one can deny that sometimes we complained. I admit, I got tired in all the tasks and decided to quit. But as I thought failure, I became stronger and stronger. It seems you’re bitten by a snake on snake and ladder but still, trying to move on and reach your goals. The 8th level is just reminiscing all the experiences that make it unforgettable for me. And the last level, making happy thoughts.

The Life Insurance Need Analysis

The Life Insurance Need Analysis Under this, the insured person pays the premium regularly to insurance company, once a policy is taken, and in lieu of this, the insurer promises to pay a fixed sum of money at the time of the death of insured or on the expiry of a specified period of time, whichever is earlier. The payment for life insurance is certain but the event for which insurance is taken is not very certain. A Beneficiary can be a Person, Business, Trust, or Estate. The Owner of the policy is the Person or Organization who pays the premiums and has ownership rights : The right to name the beneficiary The right to receive dividends and to surrender the policy for cash The right to change ownership The right to assign a policy as collateral for a loan. Death is certain, but when it occurs is not Life insurance is of utmost importance for all individuals, businesses, communities, society and general public at large. If offers protection against loss of income and compensates the titleholders of the policy. It has other principal functions besides making cash payment on death of a life insured. Life is unpredictable. As the head of the family, everyone wants a secured life for their family members. The nightmares about your familys financial protection keep haunting you. You need life Insurance because typically the need for income continues for those who are financially dependent on you, but there is no guarantee of your ability to earn consistently and for the rest of your life. Life insurance can help you safeguard the financial needs of your family. To replace income the family would need to maintain their standard of living after the death of a wage earner. Life insurance insures your life and reduces any hardship your family may have to bear in the unfortunate event of your death. Insurance can provide an emergency cash reserve. It can provide capital to pay last expenses and operating capital during a familys readjustment period. to pay off a mortgage loan and other personal and business debts or to create a rent fund. To create a fund for childrens education. To create a family emergency fund or a fund for a family member with special needs. Life insurance proceeds generate a financial lump sum that can be used to cover a familys current and long-term operating expenses. It facilitates savings for old age to enjoy secured and peaceful life as the earning capacity of a person is reduced after retirement. It encourages people to save money by making them obliged to pay premium regularly when a life policy is taken. It helps to mobilize savings of the public to channelize it for investment and thus promote economic development of the country. It (policy) can be used as a security to raise loans and thus improves credit worthiness of an individual or a business. It also has tax benefits as under Income Tax Act, premium paid is allowed as a deduction from the total income. Exhibit 1 : Life Expectancy Graph of life expectancies from birth and from age 65 from 1900 to 2003. In order to estimate the amount of life insurance that is required an agent must be able to assess with the client which costs would be faced by the survivors resulting from the premature death of the proposed life insured, and how much it would cost to maintain the same or similar standard of living. A fact-finding interview with the client will begin by establishing qualitative goals. Once quality of life has been planned then this figure can be assigned to meet those objectives. These figures are called quantitative goals. Qualitative Goals Qualitative goals are quality of life goals. They reveal lifestyle choices that have a direct bearing on expenses, risk tolerance, and investment choices. For example; a family chooses to vacation each year in England of a month has made a qualitative decision. Quantitative Goals Quantitative goals are the dollar figures assigned to qualitative goals. For example, the family who vacations in England for a month needs Rs.22,000 to pay for their holiday. What Is Life Need Analysis ? It is the actual amount that would be needed to maintain the surviving dependants for the period they remain dependants. By considering all offsetting resources and benefits, the aggregate need for insurance can be trimmed to the unmet need for insurance the gap to be filled in order to satisfy the established goals. This net estimate may be used as the basis for a specific sales proposal. The nature of the unmet needs might also suggest the amounts and combination of types of insurance to recommend, such as a specified amount of whole life or other form of level coverage and a specified amount of decreasing term coverage. There are three basic methods for measuring life insurance needs : The Human Life Value Approach and The Needs Approach The Capital Retention Approach Each approach is a tool to help determine the amount of life insurance needed by an individual or family. Life insurance provides protection from the permanent loss of income that arises from premature death. The approaches are based on the principle that a life has economic value. This value is called capitalized value of life. Capitalized value may be represented by the sum earned as salary by an income-earner who dies during the prime of his or her life. Capitalized value may also be represented by the loss of income-in-kind such as the cost of having to provide day-care, then costs of day-care or nanny services will be a cost for the survivor to pay. The objective of insurance is to replace the capitalized value of the life insured with a sum of money that when invested at the interest rate in effect at the time of need analysis will provide an annual income stream equivalent to the annual lost earning power of the life insured. This can be expressed as : Annual Income Need à · prevailing Interest Rate = Lump Sum insurance required Capitalization of income determines the amount of insurance needed to replace that lost income. Capital retention determines the amount of insurance needed to pay capital costs of survivors by providing a lump sum-the interest earned on the lump sum provides the income. For example; if todays interest rate is 4%, the capitalized value of a life insured who earns Rs. 60,000 annually is Rs. 60,000 / 4% i.e. Rs. 15,00,000. This means Rs.15 lacs would have to be invested at 4% so that Rs. 60,000 could be used annually for expenses that would have been paid by the income earner. For the Financial Dependency of Survivors The three phases of financial dependency and the costs that survivors will face during these phases are : Readjustment/ Last Expenses Dependency/ Ongoing Expenses Survivor Life Income Needs/ Future Expenses (all explained later in this chapter) It provides ample information to establish the most effective means for that potential loss. Considerations can be personal, property or the liability. Needs Analysis can help determine the right amount of life insurance that is appropriate for your needs. It explains the overall principals behind estimating the costs associated with the death or disablement of an income earner and the provision of ongoing support for any dependants and/or the insured. Also outlines the factors to consider in the planning the amount of cover for short term disablement or illness. Again it explains how the value of property assets should be estimated for insurance purposes and develops a comprehensive and integrated set of insurance policy options for the particular clients needs and circumstances. These other assets will help in determining the amount and kind of insurance necessary to meet the applicants current and future needs. When estimating the potential contribution of Social Security benefits to survivors income, you should be aware of something known as the blackout period. This is the period of time after the youngest child is 16 years old and before the surviving spouse becomes eligible for retirement benefits. During this period, no benefits will be paid by Social Security to a surviving spouse. Offsetting benefits may reduce or even eliminate some of the items in the needs list. If existing medical insurance has a large lifetime benefit, any uninsured exposure related to a last illness may be limited to the deductibles and coinsurance, if any. Existing life insurance may substantially reduce a number of needs. Group life insurance will not provide a retirement income, but it will reduce the need for insurance by a working parent working with minor children in the family. An unpaid mortgage may already be fully insured by a credit life policy. Social Security and other available benefits might cut the remaining need for retirement income considerably. How much Life Insurance/ Determining the Need for Life Insurance (A General Concept) Well, the answer isnt really how much life insurance you need actually your life insurance needs often depend on a number of factors, including whether youre married, the size of your family, the nature of your financial obligations, your career stage and your goals. Its how much investment capital your family will need at the time of your death. This excellent question is to which there are as many answers as there are people to ask. Every advisor, financial columnist and relative has a formula that they consider the best. There are a number of approaches you can use to figure out how much insurance you should have. This section is designed to present the various need analysis methods used, as well as the pros and cons of each method. As these issues deal with how to value a life, it is indeed a very complex proposition. The method that makes the most sense to you is probably the one that may work the best for you. No method is perfect, as you are trying to hit a moving target. Life brings many changes and your needs will change with them. The more assumptions you make, the more complex you will make your planning and the more chances there are that something will not work as planned. This does not mean that you should only use simplest methods it is to give you a concept of why it is important to actively participate in all of your planning, fully understand it, and constantly monitor it. After all, it is your money. Remarkably, the simplest formulas can often be the best. Another thought to keep in mind is that as your other assets grow, such as retirement plans and investments, your need for life insurance will decrease. What determines your life insurance need ? Methods of calculating life insurance need Insurance mistakes What determines your life insurance need ? Life Stages and Circumstances When determining your life insurance need, you should first consider your life stage and circumstances. Marital status, number of dependents, size and nature of financial obligations, your career stage, and your intentions to pass on your property are all factors to consider. Your need for life insurance changes as the circumstances of your life change. Starting Out In the Starting Out stage of life, you may be just beginning your career or family. You may not have children or other dependents at this stage, but that doesnt mean you have no obligations. For instances, if you paid for your college education with student loans, you likely had a cosigner for your loan-may be your parents or a grandparent. The same may be true of your car loan. If you were to die before the loan is paid, your cosigner would be obligated to pay the debt. Under law, a cosigner is responsible for full payment of a debt in the event of default. Death doesnt erase the debt obligation. single Adult A growing percentage of the population now falls into the single adult demographic group. This group covers a broad spectrum of ages, lifestyles, and obligations. Family Obligations-Parents Although you may not have a spouse, your death could have a serious financial impact on other family members. If, like many adults, you are supporting your parents (either financially or with care), your death could have a major impact, both emotionally and financially. They would not only lose the support you have been providing to them, but they would also need to come up with the money for your final expenses. Family Obligations-Children If you are a single parent, the primary financial support for your children would die with you. If you are lucky, you may have family members who would step in and help your children if you died. If you are even luckier, they will be able to provide your children with the education and lifestyle you had hoped for them to have. Your need for life insurance as a single parent is even greater than that of a dual-parent, dual-income household, which would still have one income if one parent died. Life insurance is a cost-effective way to make sure that your children are protected financially should anything happen to you. Debt Obligations In this stage of life, you may still be paying for or even still accumulated education loans. You may have purchased a house or condo with a cosigner. If you died, your cosigner would be legally liable for the payments on the debt. Protect Your Insurability Another reason to buy life insurance at this stage of your life is to protect your future insurability. Once you buy a permanent, cash value life insurance policy, it remains in effect for your entire life (assuming the premiums are paid), even if your health changes. If you were to experience a serious change in health, you might not be able to buy additional insurance coverage, but you would still have the permanent coverage you already own. Dual-Income Couple or Family If you and your spouse both earn an income, it is possible that if one of you died, the other may be able to cope financially on the remaining income. If there are mortgages, joint credit cards or other debt, or children in the picture, the loss of one income could be much more difficult to overcome. The more people who depend on your income while you are alive, the more life insurance you should own. If you died today with insufficient or no insurance, your mate could be forced to give up the residence or lifestyle for which you have both worked. When there are children involved, the loss of one breadwinner could mean a setback in the daily way of life, not to mention any plans for private school or college. Parent of Grown Children Just because your children have grown up and left the nest doesnt mean you have no need for life insurance. you may have spent your entire adult life building an estate that you intend to pass on to your children, grandchildren, or favorite charity. You can use life insurance to ensure that the bulk of your estate passes to your heirs or designated charitable organization subject to certain tax advantages. Part of Overall Financial Planning Determining your life insurance needs should not be done in isolation. Instead, it should be looked at as part of your overall financial plan, with consideration given to your goals for savings and retirement, as well as tax and estate planning. As your life changes, your financial goals may change, as well as your need for life insurance, making it important to also periodically review your coverage. Methods of Calculating Life Insurance Need Several methods are used to calculate the appropriate level of insurance for you and your situation. While they all share common features, some methods strive to be more simplistic, while others involve more sophisticated calculations. You may want to determine an amount on your own, using one of the simpler methods. This can provide a basis for your discussions with your financial planner. Insurable Interest Before you begin calculating your insurance needs, it is important to determine insurable interest. Basically, having an insurable interest in a persons life means that you would suffer emotional or financial harm or loss if that person were to die. It is always assumed that you have an insurable interest in your own life. However, to prove an insurable interest in someone elses life, you must have a relationship to that person based on blood, marriage, or monetary interest. You must have an insurable interest before you can purchase an insurance policy. Family Needs Approach The family needs approach is one of the more comprehensive methods of calculating your life insurance needs. It assumes that the purpose of life insurance is to cover the needs of the surviving family members. This method takes into account the immediate and ongoing needs of the surviving family members, as well as income from other sources and the value of assets that could be used to help defray the familys expenses (such as bank accounts and real estate). Capital Retention Approach The capital retention approach is one of two calculation methods under the family needs approach. This approach assumes that life insurance principal will support the family indefinitely into the future. Because you will purchase more life insurance under this method, you will be in a better position if the surviving spouse lives longer than expected. Capital Liquidation Approach The capital liquidation approach is the second of two calculation methods under the family needs approach. This method does not provide as much continuing capital for the surviving spouse or for heirs after the death of the surviving spouse. However, it does allow you to spend less money by purchasing a lesser amount of life insurance coverage. Estate Preservation and Liquidity Needs The estate preservation and liquidity needs approach attempts to determine the amount of insurance needed at death for items such as taxes, expenses, fees, and debts while preserving the value of the estate. This method considers all the variables of family lifestyle and the total cash needed to maintain the current value of the estate while providing adequate cash needed to cover estate expenses and taxes. Income Replacement Approach The income replacement calculation is based on the theory that the purpose of insurance is to replace the loss of your paycheck when you die. This analysis determines an economic or human life value and factors in salary increases and the effects of inflation in determining the appropriate level of coverage. While more comprehensive than the rules of thumb, this method still fails to consider special circumstances or financial needs and operates on the premise that the current level of income provides a satisfactory standard of living that will remain level throughout the future. Rules of Thumb The rules of thumb are extremely basic calculations. They provide a starting point but fail to recognize special family circumstances or needs and focus only on the most basic components. One rule of thumb dictates that multiplying your salary by a certain number will provide an adequate level of insurance, while another calculates need based on normal living expenses. Insurance Mistakes No Insurance The worst mistake you could make concerning life insurance is having a need and not having any insurance at all. Very often, people can find all sorts of excuses for not buying life insurance. Its no fun to plan for your death, for one thing. For another, theres the tendency to think that dying wont happen to you, only to some person you read about in the obituaries. But how many times have you heard about a young, apparently healthy person dying suddenly in a car accident, leaving behind a spouse, a young child, and no insurance? Sadly, it happens, and when it does, the family faces not only emotional trauma but possibly an extremely difficult financial situation, as well. Not Enough Insurance The majority of people with insurance are underinsured. Insufficient coverage can occur as a result of buying what is affordable instead of what is needed. Failure to review your coverage periodically could also result in insufficient insurance, even if you started out with adequate levels. Inflation rates, your career, and your lifestyle may have changed. Your family could be faced with a large financial gap and left unable to maintain the current lifestyle if you died today. Consequences could include loss of the family home, scaling back of college plans, and possibly years of financial difficulty. Too Much Insurance If you purchased a large policy during one point in your life and then didnt adjust your coverage when your insurance need was reduced, it is possible that you have too much life insurance. this is another good reason to periodically review your coverage with your financial planning professional. Periodic reviews of your insurance coverage can reveal opportunities to change your levels of coverage to match your current and projected needs. Nowà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦review your coverageà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦ Trying to figure out how much life insurance is enough isnt always easy, and that amount will likely change with your changing circumstances. By examining your familys anticipated expenses during various periods after your death, you get a more realistic estimate of your life insurance needs. Unfortunately, many people underestimate their insurance needs and are under-insured. Often, the purchase of life insurance is based on cost instead of whats needed. By the same token, its possible to have more insurance than you need. You may have purchased a large policy during a particular point in your life, and then didnt adjust your coverage when your insurance need was reduced. Both of these circumstances are reasons to review your insurance coverage periodically with your financial professional. Doing so can reveal opportunities to change your levels of coverage to match your current and projected life insurance needs. Determining the Need for Life Insurance/ How Much is Enough? (A General Concept) HUMAN LIFE APPROACH The present value of the familys share of the deceased breadwinners future earnings. The human life value concept deals with human capital. Human capital is persons income potential. The Human Life Value approach uses mathematical computation to determine how much life insurance is needed by valuing a human life. The Human Life Value approach considers the human being to be an income-producing machine. It is a device that mathematically converts your output into an amount of cash, your expected income until retirement. It determines the value today of cash that is flowing out in the future. This method focuses on an individuals future stream of income. It considers such things as annual salary and expenses, years remaining until retirement, and the future value of current rupees and translates this into an amount of insurance needed to replace the income stream in the event of premature death. What is your Human Life Value ? Beyond all doubt, your life is invaluable. Yet, there is a certain worth that can be attributed to the financial support you offer your parents, spouse or children. This worth is referred to as Human Life Value (HLV). In the future, if your family does not have the protective blanket of your presence, they will no longer be able to enjoy the benefits of the income you earned. Put simply, Human Life Value is the present value of your future earnings. Why should you calculate your Human Life Value ? You should calculate your Human Life Value so you can accordingly invest in insurance plans that provide your family with adequate finances and hence security even in your absence. The human life value concept goes beyond numbers and considers the entire impact caused by the loss of a human life and the value to a persons loved ones. How much are your tomorrows worth? What is your Potential Earning Power (PEP) HLV of any person can be measured by capitalized value of that part of his income or income earning capacity devoted or meant for dependants arising out of economic forces incorporated within his being, like character, health education, training, experience and ambition. For better understanding let us see some illustrations. Illustration Mr. X :- Age-40 yrs, Retirement age-60 yrs, Current salary-3,00,000 per annum (expected to remain same), Personal expenses-1,25,000, Net contribution to family-1,75,000 (300000 125000). Suppose he dies at the age of 40. Income lost by the family-175000 * 20 yrs (60 40) * discount rate for 20 yrs (Present value factor): 19,00,000. Illustration Mr. Y :- Age-30 yrs, Age of spouse-27 yrs, Life expectancy of spouse-70 yrs, Age of child-3 yrs, Childs share of monthly household expenditure-10 %, Child will remain dependant till-22 yrs, Monthly household expenditure Rs. 40,000, Out of this, amount spent on Mr. Y Rs. 10,000. Expected inflation in household expenditure 5 %, Money to be set aside for childs education (in present value terms) Rs. 10,00,000. Money to be set aside for childs marriage/ other needs (in present value terms) Rs. 7,50,000. Outstanding loans Rs. 15,00,000. Other liabilities Rs. 5,00,000. Medical expenditure/ emergency fund Rs. 5,00,000. Rate of return on low risk securities/ deposits 8 %. Hence, HLV will be Rs. 1,66,45,475. If the rate of return on low risk securities/ deposits is 7 %, Revised HLV will be Rs 1,81,83,996. How do you determine your Human Life Value ? This approach is about determining how much insurance is needed and is based simply on how much income the proposed insured earns. All individuals who have financial dependants need life insurance. Factors to be taken into consideration while calculating HLV are age, current and future expenses and current and future income. The formula is; Annual Income / Interest Rate = Lump Sum (The Human Life Value). Illustration If the annual income of the primary wage-earner is Rs.30,000, the total amount of insurance needed would be (assuming a nominal rate of interest of 8% and a long-term inflation rate of 3%, the real rate of interest is 5%): Rs. 30,000 à ·.05 = Rs.600,000 (human life value = amount of insurance required) If Rs.600,000 is invested at 5%, the return will be Rs.30,000 annually. Thus, the family of the insured has, in economic terms, would replace the income-earning value of the life lost through a policy with a Rs.600,000 death benefit. Illustration An insured makes Rs.42,000 a year and the current interest rate is 3.4%. She has a generous policy plus disability benefits that pay 70% of her salary. How much life insurance does she need based on capitalization of income? A. Rs. 1428 B. Rs. 12352.94 C. Rs. 1,42,800 D. Rs.1,235,294.10 There are different school of thoughts and approaches for purchasing and calculating the needs of life insurances, which say as under : One should purchase insurance worth 5 to 10 times the current annual income. This is an old thumb rule that does not take into consideration current assets and any special needs the customer or their family may have. Thus, When ones annual income is known, the insurance need is calculated simply as annual income multiplied by the number of years to service left. Ones yearly outgo towards Insurance premium should be 10% of ones annual Income. Thus, Life insurance need is, the financial need analysis approach. This is an approach which can take care of specific needs of an individual. Here, the basic objective is that the insurance coverage should be sufficient to provide for the dependants needs in case the breadwinner dies early. Steps for Calculating Human Life Value Approach In the human life value approach, the first step is to find the amount of annual income that is surplus to the individual. The surplus is the amount above what the insured would consume himself; which provides the overall standard of living for the individual and the family. The surplus includes amounts spent on education for children, automobiles, vacations, clothing, and food for everyone in the family except him. The items to include in costs of self-maintenance are any money spent on his portion of housing, his clothing, food, the portion of his salary that goes for FICA, federal, state, and local taxes, and all other expenses to maintain the insured as a productive asset. The next part of the human life value approach involves plugging the given information into the mathematical model and calculating the answer. To determine the surplus, subtract the self-maintenance expenses from the average income. Exhibit 2 : Steps for Calculating Human Life Value Approach Weaknesses of the Human Life Value Approach Other sources of income are ignored, (e.g., business earnings), it is calculated by using a constant income stream over the life of the insured since it is difficult to know what increase in income is probable. It ignores the number of years that income (mentioned above) will be required; a person aged 25 and a person aged 65 would appear to require the same amount of coverage. In its simplest form, work earnings and expenses are assumed to be constant and employee benefits are ignored. The amount of money allocated to the family can quickly change because of divorce, birth of child, or death of a family member. The effects of inflation on earnings and expenses are ignored. Points to Ponder : One, HLV is a moving target and to make it meaningful, you must review it once a year. Rather than chasing the revised HLV year after year, the aim should be to get the broad trend right with the expectation that in the long-term, the actual and estimate will converge. Two, do not get overawed by the HLV numbers thrown up. The `number is just a starting point and must be put into the context of your present ability to set aside money. Three, remain disciplined in the sense that at any point in time you should have planned in such a manner that in your absence, your family will not need to compromise on their yet-to-be fulfilled needs. NEEDS APPROACH It is a method of calculating how much life insurance is required by an individual/ family to meet their needs (expenses) if the family head dies. These include things like funeral expenses, legal fees, estate and gift taxes, business buyout costs, probate fees, medical deductibles, emergency funds, mortgage expenses, rent, debt and loans, college, child care, private schooling and maintenance costs. This approach contrasts the human-life approach. The needs approach is a function of two variables: How much will be needed at death to meet obligations ? How much future income is needed to sustain the household ? When calculating your expenses, it is best to overestimate your needs a little. By doing this you will be buying and paying for a little more insurance than you need, but if you underestimate, you wont rea