Speaker’s Name Here… Date Here… INSURANCE BASICS Speaker’s Name Here… Date Here… 1

Basic Concepts of Insurance Insurance Defined Risk Sharing Contractual Agreement Concept of Indemnity 2

Four Major Types of Insurance Life Insurance Health and Disability Insurance Property Insurance Direct, Indirect losses Casualty Insurance Liability Auto, Workers Comp 3

Life Insurance Whole Life Term Life Straight Universal Permanent Single-Year Multi-Year 5

Cost Factors Contract Amount Type of Policy Probable Life Expectations Whole or Term Probable Life Expectations Gender Age Medical History 6

Health and Disability Insurance Types of Policies Major Medical, Comprehensive Types of Rating Individual, Group Health Insurance Options HMO, PPO Individual Group 7

Cost Factors Group Experience Age, Gender Medical History Deductible Co-Payment Type of Policy 8

Property Insurance Fire and Other Perils Personal Liability 9

Why Should You Buy? Mortgage Requirements Financial Ruin Damage to your home Damage to your property and belongings Liability suits due to negligence 10

Perils Protected Against Fire, Lightning, Smoke, Explosion Windstorm, Hail, Weight of Ice Riot, Civil Commotion Aircraft, Vehicles, Falling Objects Theft, Vandalism, Malicious Mischief Accidental Overflow of Water, Plumbing Freezes 11

Usually Not Covered Flood Earth Movement Earthquake Landslide Mudflow Intentional Loss by or at the direction of an insured 12

Cost Factors Policy Limits Location Protection Type of Construction Loss History Policy Credits 13

Auto Insurance Definition History of Automobile Insurance Financial Responsibility State Regulation 14

Why Should You Buy? It’s the Law Lienholder Requirements Financial Ruin Property damage Physical damage Medical costs 15

What If I Don’t? Rebuilding a Car Loss of Use Medical Costs A new Ford Taurus costs about $28,000 If the same car was totaled in an accident, it would cost about $75,000 to rebuild it using replacement parts Loss of Use Medical Costs At least $2,500 per day 16

Primary Types of Coverage Liability Personal Injury Protection Collision Comprehensive Uninsured Motorists Other Options 17

Cost Factors Age Sex Marital Status Amount You Drive Where You Drive What You Drive Accident and Ticket Record 18

Ways to Save Clean Driving Record Driver’s Training Course Good Student Discount Limits/Deductibles Type of Car Shop Your Company! 19

Insurance Grouping In 2008, motor vehicle crashes were the leading cause of death for 15 to 20 year olds Teen drivers were involved in 19% of all motor vehicle accidents Teens were involved in 13% of all fatal accidents The risk of being involved in a fatal crash for teens is three times greater than for drivers age 65 to 69 Source: National Safety Council 4

Are You a Safe Driver? A survey conducted in spring 2008 found that although the majority of teens (91%) believe they are driving safely, only about a third (34%) think their friends are good drivers 97% said they had seen other teens engaging in risky behaviors such as speeding and not wearing seatbelts while driving 76% talk on cell phones while driving, 57% read or send text messages, 92% play loud music and 48% say they are easily distracted when friends are passengers

Over 350 different careers! Careers in Insurance Over 350 different careers! 20

Find out more at… www.investprogram.org Students form and operate model insurance agencies and an insurance company home office in the classroom Annually prepares high school and community college students for insurance careers Teaches marketable business skills Find out more at… www.investprogram.org 21