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  1. Insurance Jeopardy© Joan Koonce, Ph.D., AFC(SM) Extension Financial Planning Specialist

  2. Terminology & Concepts Health & Disability Insurance Life Insurance Property & Liability Insurance Other/ Supplemental Insurance 100 100 100 100 100 200 200 200 200 200 300 300 300 300 300 400 400 400 400 400 500 500 500 500 500

  3. Terminology & Concepts - 100 This is the dollar amount you pay towards your expenses before the insurance company pays their portion. • What is the deductible?

  4. Terminology & Concepts - 200 This is the percent of your expenses you pay after the deductible. • What is coinsurance?

  5. Terminology & Concepts - 300 Many insurance companies will not cover these until after a waiting period has expired. • What are pre-existing conditions?

  6. Terminology & Concepts - 400 This provision in an insurance policy puts a limit on the total amount you will pay out of pocket for your loss. • What is a coinsurance cap or stop-loss provision?

  7. Terminology & Concepts - 500 This provision in an insurance contract prevents you from being reimbursed for more than 100 percent of your loss. • What is a coordination of benefits clause?

  8. Health & Disability - 100 You use this type of account to pay for medical expenses with pre-tax dollars. • What is a flexible spending account?

  9. Health & Disability - 200 This is the most liberal definition of disability found in disability income insurance contracts. • What is own occupation?

  10. Health & Disability - 300 Long-term care insurance companies assess the need for long-term care by using these as benefit triggers. • What are Activities of Daily Living (ADLs)?

  11. Health & Disability - 400 This type of health insurance plan costs more but provides you with the greatest choices of doctors. • What is fee-for-service or indemnity plan?

  12. Health & Disability - 500 These health care plans limit your choice of doctors. Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) are in this category. • What are managed health care plans?

  13. Life Insurance - 100 Because it is temporary insurance protection and has no savings component, it costs less than other types of life insurance. • What is term life insurance?

  14. Life Insurance - 200 Doing this will cause the death benefit of a life insurance policy to be less than the original face value when purchased. • What is taking out a policy loan?

  15. Life Insurance - 300 Lump sum, interest only and life annuity are examples. • What are settlement options?

  16. Life Insurance - 400 This feature in a life insurance policy allows you to exchange a term life insurance policy for one that has a cash value. • What is a convertibility feature?

  17. Life Insurance - 500 These two types of life insurance have a savings component and allow you to choose your own investments. • What is variable life and variable-universal life?

  18. Property & Liability - 100 25/50/25 • What is the minimum amount of automobile bodily injury/property damage liability coverage required in Georgia?

  19. Property & Liability - 200 This type of automobile insurance covers your losses if you are hit by a hit-and-run driver. • What is uninsured/underinsured motorist coverage?

  20. Property & Liability - 300 When purchasing homeowner’s insurance to cover your home, this is uninsurable. • What is land?

  21. Property & Liability - 400 You add these to your standard homeowner’s policy to increase coverage on items that are inadequately covered. • What are floaters?

  22. Property & Liability - 500 These two types of automobile insurance coverage are required by lenders. • What is collision and comprehensive?

  23. Other/Supplemental - 100 Low-income, blind or elderly persons can obtain health care through this program funded by the state and federal government. • What is Medicaid?

  24. Other/Supplemental - 200 This type of insurance only covers specific illnesses or accidents. • What is dread disease and accident insurance?

  25. Other/Supplemental - 300 It is a type of insurance that must be purchased if you don’t pay at least 20 percent down when purchasing a home. • What is private mortgage insurance?

  26. Other/Supplemental - 400 This coverage pays for the difference between the vehicle’s value and what you may still owe on the loan. • What is gap insurance?

  27. Other/Supplemental - 500 People purchase these types of insurance to pay off their mortgage in the event of their death and make their mortgage payment if they become disabled. • What is credit (mortgage) life and credit (mortgage) disability income insurance?

  28. Insurance Terminology and Concepts • Risk • The uncertainty that you will incur a financial loss and the uncertainty regarding the size of the financial loss • Pure Risk • Speculative Risk

  29. Insurance Terminology and Concepts • Ways to Manage Risk • Avoid risk • Example: Don’t drive • Reduce risk • Example: Wear seat belts • Retain or accept risk • Example: Pay all or a portion of the loss • Transfer or share risk • Example: Purchase insurance

  30. Insurance Terminology and Concepts • Premium • Deductible • Coinsurance • Co-payment • Coinsurance Cap or Stop-Loss Provision • Pre-existing Conditions • Waiting Period • Policy Limits • Policy Provisions • Coordination-of-benefits Clause

  31. Insurance Terminology and Concepts • Types of Insurance • Health, Disability Income and Long-Term Care Insurance • Life Insurance • Property and Liability Insurance • Automobile insurance • Homeowner’s insurance • Personal umbrella liability insurance

  32. Health Insurance • Major Types of Health Care Coverage • Basic health insurance • Hospital insurance • Surgical insurance • Medical expense insurance • Major medical insurance

  33. Health Care Plans • Private Health Care Plans • Government-Sponsored Health Care Plans

  34. Private Health Care Plans • Fee-For-Service or Traditional Indemnity Plans • Managed Health Care Plans • Health maintenance organizations (HMOs) • Preferred provider organizations (PPOs)

  35. Government-Sponsored Health Care Plans • Medicaid • Medicare • Worker’s Compensation

  36. Medical Flexible Spending Accounts • These accounts allow you to pay for medical expenses with pre-tax dollars. • Money put into the account is used to pay for un-reimbursed medical expenses. • Some expenses are not eligible for coverage. • You either use the money or lose it.

  37. Disability Insurance • Disability income insurance replaces 60 to 80 percent of your income if you are unable to work due to an illness or injury. • Own versus any occupation • Residual clause • Benefit period • Elimination (waiting) period • Short-term versus long-term disability

  38. Long-Term Care Insurance • Long-term care services are provided when a person cannot perform certain activities of daily living (ADLs) and/or is cognitively impaired. • What does long-term care insurance cover? • Skilled, intermediate and custodial care • Home care services, physical therapy, homemakers, home health aides • Assisted living, adult daycare, other care in the community • Alternate care (other physician recommended services) • Respite care for the caregiver • These accounts allow you to pay for medical expenses with pre-tax dollars.

  39. Life Insurance Terms • Face Value: the benefit due upon death • Insured: the person whose life is covered by the policy • Policyholder or Policy Owner: the individual or business that pays for and owns the policy • Beneficiary: the recipient of the benefit upon the death of the insured

  40. Two Basic Types of Life Insurance • Term Insurance • Cash-Value Insurance • www.trustedquote.comwww.trustedquote.com

  41. Types of Cash-Value Life Insurance • Whole Life Insurance • Universal Life Insurance • Variable Life Insurance • Variable-Universal Life Insurance • www.lifeinsuranceindepth.comwww.lifeinsuranceindepth.com

  42. Life Insurance Clauses • Incontestability Clause • Places a time limit, usually two years, on the right of the insurance company to deny a claim based on information provided in the application • Suicide Clause • Gives the insurance company the right to deny a claim if the inured dies by suicide within a certain period of time, usually two years

  43. Life Insurance Settlement Options • Lump-Sum Settlement • Interest-Only Settlement • Period-Certain Settlement • Installment-Certain Settlement • Life-Annuity or Life Income Settlement

  44. Types of Automobile Insurance • Bodily Injury and Property Damage Liability • Required coverage in the amount of 25/50/25 in Georgia • Medical Payments

  45. Types of Automobile Insurance • Uninsured and Underinsured Motorist Bodily Injury and Property Damage • Collision and Comprehensive • Deductibles apply to this coverage • Required by lenders if your car is financed

  46. Types of Automobile Insurance • No-Fault Insurance • Only available in “no-fault” states • Your insurance pays for your losses and their insurance pays for their losses – no legal battles. • www.autoinsuranceindepth.comwww.autoinsuranceindepth.com

  47. Homeowner’s Insurance Terms • Replacement Cost/Value: the amount necessary to repair, rebuild or replace an asset at today’s prices • Current Market Value (CMV): Original purchase price minus depreciation, also referred to as actual cash value • Floater Policies • Inflation Protection Endorsement

  48. Six Basic Forms of Homeowner’s Insurance • Basic Forms of Homeowner’s Insurance • Broad Form Homeowner’s Insurance • Special Form Homeowner’s Insurance • Renter’s Insurance • Condominium Owner’s Insurance • Older Homes Homeowner’s Insurance • Policies differ based on the type of property, amount of coverage and number of perils (events that cause a loss such as fire, tornado, etc.) covered.

  49. Homeowner’s Insurance Coverage • Property • Home • Other detached buildings • Personal property • Landscaping • Loss of use • Liability • Comprehensive personal liability • No-fault medical payments • No-fault property damage

  50. Personal Umbrella Liability Insurance • Covers liability costs after the underlying automobile and homeowner’s policies have been exhausted • Standard amount of coverage is $1 million although higher amounts can be purchased