Personal Risk Management Chapter 6

Risk Assessment and Strategies Risk - the chance of injury, damage, or economic loss Speculative risk Pure risk Loss - some type of physical injury, damage to or disappearance of property Probability - likelihood of a risk resulting in a loss

Risk Assessment and Strategies Personal Risk - potential loss of something of personal value Financial Risk – potential loss of monetary value Risk to Financial Resources –loss of earning power or assets

Risk Assessment and Strategies Risk Assessment – process of identifying risks and deciding how serious they are Risk Strategies – plans or actions aimed at reducing, avoiding, transferring, or assuming risk Risk Reduction Risk Avoidance Risk Transfer Risk Assumption

Risk Assessment

Health Insurance Health Insurance – plan for sharing the risk of medical costs from injury or illness Fee-for-Service – unmanaged care , choose your provider, provider paid for service Preferred Provider Organization (PPO) – network of independent providers Health Maintenance Organization (HMO) – network of associated providers, emphasize preventive care Government Sponsored Health Care

Health Insurance Your Role in Health Care Lifestyle choices Naturopathic choices Call-a-Nurse

Health Insurance Types of Health Coverage Basic healthcare Major Medical Dental and Vision Catastrophic Illness Long-Term Care

Health Insurance Costs Premiums Deductibles Copays Coinsurance Long-Term Care Stop-Loss Provisions Health Savings/Flexible Spending Accounts

Disability Insurance Disability Insurance – Provides income to replace a portion of normal earnings when insured is unable to work due to non-work related injury or illness Short-term Disabliity Long-term Disability Social Security Disability

Life Insurance Life Insurance – pays benefits to a beneficiary upon death of the insured Beneficiary Term Insurance Permanent Insurance

Life Insurance Term Insurance – temporary insurance, for a designated “term” Renewable Term Decreasing Term pays benefits to a beneficiary upon death of the insured Level Term

Life Insurance Permanent Insurance – remains in force as long as premiums are paid Whole Life Limited-pay Life Universal Life Variable Life

Life Insurance Group Life Insurance Portable Insurance

Protecting Property Homeowner’s Insurance Renter’s Insurance Real property Personal property Liability Inventory Renter’s Insurance

Protecting Property Automobile Insurance No-Fault Insurance Liability 100/300/50 Collision Comprehensive Personal Injury Protection Uninsured/Underinsured Motorist Protection Towing/Rental Car Coverage No-Fault Insurance

Protecting Property

Reducing Costs Higher Deductibles Change Habits/Behaviors Combine/Reduce Coverage Comparison Shopping Buy Online Timing Premiums Piggybacking High-Risk Pools Discounts

Maximizing Benefits Review Coverage Umbrella Coverage

Umbrella Policy

Questions?

Homework