Insurance

1. Insurance Family Dynamics Mrs. Dianna Bowen

2. Terms to Understand • Insurance • Purchased protection that guarantees to pay you in the even t of certain specified losses • Policy • The written agreement between a consumer who purchases insurance and the insurance company • Premium • Payments insured people make to the insurance company in exchange for coverage • Claim • A request made by the holder of an insurance policy for payment of a loss

3. Terms to Understand • Liability • Legal responsibility to pay someone who has suffered an injury or loss caused by another • Deductible • A set amount an insured person must pay per loss before the insurer will pay benefits • Co-insurance • An arrangement in which the insurance company and the insured person share the cost of claims after the deductible is met. • Appraisal • An estimate of value made by a qualified person

4. 4TYPES

5. Auto Insurance

6. COLLISION • Damage to your own vehicle due to a traffic accident

7. Comprehensive physicaldamage coverage Damage due to: • Theft • Vandalism • Fire • Hail • Etc.

8. Liability coverage Injury or damage you cause to others

9. 2 parts of liability coverage • Bodily injury liability • Covers expenses related to injuries suffered by others • Property damage liability • Covers damage to: • Vehicles • Buildings • Trees, lawns • Telephone poles

10. Requirements for coverage under a liability policy • Vehicle must be driven by: • Policyholder • Member of policyholder’s immediate family • Someone who had permission from the policyholder to use the vehicle • Driver must have been licensed at the time of the accident

11. Medical Payments Coverage(Personal injury protection) • Covers injury to you or your passengers due to a traffic accident.

12. Uninsured/UnderinsuredMotorist Coverage Injury or damage to you, your passengers, or your vehicle caused by a driver without adequate insurance.

13. Amount of coverage Deductible Age of insured Gender of insured Marital status of insured Driving record of insured Type of vehicle Age of vehicle Vehicle use Place of residence Number of drivers on the policy Factors affecting cost ofautomobile insurance

14. TOTALED • ? Insurance company will pay ? • Amount the vehicle was actually worth at the time of the accident minus the deductible

15. Home Insurance2 Types

16. Property Coverage • Insures against risks such as fire and theft • Real property • Structure such as a house or garage • Personal property • Can be moved, such as furniture, appliances, clothing, & jewelry

17. Liability Coverage • Financial protection against certain losses caused to others. • Example: medical bills if someone is injured while visiting your home

18. But I rent an apartment? Do I need insurance?

19. Home Insurance is important to renters • Property owner’s policy does not cover renter’s personal property • Nor does it provide liability coverage for injuries that occur inside the rental unit

20. Payment Options • Actual Cash Value • Pay the current value of your property • Does not in include depreciation amount • Depreciation – loss of value of an item over time • Replacement Cost • Pays the cost of replacing items with comparable new ones • What it would cost you now to purchase a new item

21. How much insurance coverage do I need? Of Replacement Value

22. Home Insurance policy – covers the house and an attached garage

23. Personal Property Insurance Coverage – covers all household items and other belongings owned by family members, except vehicles. At home or away from home

24. Flood Insurance Earthquake insurance Separate Coverage

25. Types of liability coverage • Personal liability coverage • Protects you from lawsuits arising from property damage or bodily injury • Medical payments coverage • Protects you, your family, and your guests from accident-related medical bills • Physical damage coverage • Minor damage that you or someone in your family causes to another’s property

26. Deductible Local firefighting capability Nearest fire station and fire hydrant Professional or volunteer Amount of equipment Construction materials Lower for concrete and brick Preventive measures Alarm systems Smoke detectors Fire extinguishers Deadbolt locks Factors influencing cost

27. Health Insurance

28. Kinds of Coverage • Medical benefits • Pays a large share of hospital and surgical • Usually also covers doctor visits and prescriptions • Major medical coverage • Catastrophic illnesses – heart attack or cancer • Begins after basic medical limits reached • Dental benefits • Covers routine exams, cleanings, X rays, fillings and repairs, and oral surgery • Usually does not cover orthodontics

29. Kinds of Coverage (cont.) • Vision benefits • Covers eye exams, glasses, contacts • Disability insurance • Replaces part or all of income if unable to work because of illness or accident • Usually has a waiting period between first day of disability and beginning of benefits • Long-term care insurance • Covers cost of extended nursing home stay • May also cover home health care • Separate policy is usually needed

30. Terms to know • Exclusion • Specific conditions not covered or services not paid by health insurance • COBRA • Federal Law – under certain circumstances, workers and their families can keep their previous group coverage, at their own expense, for up to 18 months • Primary care physician • A physician that coordinates a patients care • Usually must see this physician first for medical • Co-payment • A flat fee given to a health care provider at the time of service (usually $10, $15, or $20)

31. Health Care Plans • Fee-for-service plan • Charged a fee for each medical service received • Insurance pays a portion – you the rest • Provides the widest rang of choices of doctors and hospitals

32. HMO • Health Maintenance Organization • A health care group that offers medical care to members for a prepaid fee and small co-payment • Least costly to consumers • Most restrictions • Must use doctors and hospitals within the group • If a doctor outside the group is used the cost to the consumer is higher

33. POS • Point-of-Service Plan • Provides the option of using health care providers outside the plan’s network • Using doctors outside the network cost more

34. PPO • Preferred Provider Organization • A group of health care providers who band together to provide services at a discount • Do not require that a primary care physician coordinate care

35. Government Health Care Programs • Medicaid • Medical aid to low-income families • Those near the poverty level and have no other means to pay for medical bills • Social Security Disability Benefits • Workers who have paid into the U.S. Social Security system • Have conditions that prevent them from working • Workers’ Compensation • Covers employees injured while at work • Also covers job-related illnesses and death

36. Medicare • Provides coverage for U.S. citizens over age 65 • Covers some disabled persons under 65 • Does not cover everything

37. Hospital Insurance (Part A) • No Premiums • Helps pay for hospitals and certain other facilities • May pay for some home health care

38. Medical Insurance (Part B) • Optional • Has a monthly premium • Helps pay for services not covered under Part A • Doctor’s visits • Lab tests • Therapy care

39. Medigap Policies • Provided by a private health insurance company • Used to supplement Medicare coverage • Plans vary from state to state and company to company • Consumer must obtain and pay for individual policy

40. Life Insurance

41. Term Insurance • Gives protection for a specific period of time • Level term • Most common type of term • Premiums and benefits remain the same • Decreasing term • Premiums are fixed • Death benefit is gradually reduced over the life of the policy • Renewable term • Guarantees the right to renew coverage without another physical • Convertible term • Allows you to change from term to permanent coverage without another physical • Premiums are generally higher

42. Permanent Insurance • Protection for the entire lifetime of the policyholder • Sometimes called – cash value life insurance • Premium includes • Cost of insurance • Additional amount that is put into an investment account • Cash value – additional amount + investment earnings • Face value • The amount of insurance coverage payable as a death benefit

43. Types of Permanent Insurance • Whole life • Also called straight-life or ordinary-life • Protection for your entire life as long as the policy remains in effect • Premium is set when the policy is bought and remains the same • Limited-payment life • Pay premiums for a set number of years or to a certain age • Coverage continues until death

44. Universal life • Provides a guaranteed minimum rate of return on investment component • Has flexible features • May reduce or increase the face value as needs change • Premiums can change with situation • Variable life • Policyholder has control over how the cash value is invested

45. BENEFICIARIES • The person or group to whom death benefits will be paid.

46. Factors Affecting Cost • Insured’s health • Family health history • Occupation or hobbies • Sky diving vs reading • Gender • Age of insured