Wiening, Personal Insurance (First Edition) – SK
Detail Outline for Exam 7 – 2007 Part C
Wiening, Personal Insurance (First Edition) – SK (We also have the book.)
Chapter 10. Personal Loss Exposures and Financial Planning
Social Security – OASDHI = Old-Age, Survivors, Disability, and Health Insurance program. When only cash benefits are discussed, this is usually referred to as OASDI. When Medicare is included, it’s OASDHI.
Basic Characteristics of OASDI
Compulsory Program – results in 2 advantages:
1) provides a base of financial security to the population.
2) controls adverse selection as all are covered.
Minimum Floor of Income
Emphasis on Social Adequacy – meant to provide a minimum standard of living to all beneficiaries. The benefit formula is heavily weighted in favor of low-income groups, the aged, and people w/ large families.
Benefits Loosely Related to Earnings
Benefits Prescribed by Law
Full Funding Unnecessary
No Means Test
Fully Insured – those who have 40 credits or worked full time for 10 years.
Currently Insured – those who earned at least 6 credits during last 13 calendar quarters.
Disability Insured – must be eligible as described below.
Types of Benefits
Retirement Benefits – full benefits payable at normal retirement age.
Early Retirement Age
Delayed Retirement Credit
Monthly Retirement Benefits
Disability Income Benefits