Friday April 25, 2015 Types of Investments Notes Investment Half-sheet Insurance Notes Agenda

Civics and Economics Day 145

What is a Bond? A fixed-interest obligation that either pays a yearly dividend or is paid off when it “matures” after a fixed amount of time. Example: Buy a $100 dollar bond for $75 that matures in 20 years. Considered a very safe investment

Certificate of Deposit A certificate issued by a bank to a person depositing money for a specified length of time. Most will pay you the amount plus interest if you wait until maturity, but will charge you a penalty to remove it early. Last up to 5 years. Considered a Safe Investment

Mutual Fund and Index Funds Mutual funds are corporations that buy hundreds of different stocks. These have lower/moderate risk. There are experts handling these funds Index funds invest in things all across the board and general perform better. Considered Moderate/Medium Risk

Stock Most people make money by buying at a low value and selling high. Each share entitles shareholder to a vote and dividends. Dividends are portions of a corporation’s profits that it pays to its shareholders. Considered very risky

Investing Strategies A Plan to take your investable money and make investment choices between bonds, CDs, real estate and stocks. Take into consideration age, risk tolerance level, and short/long term objectives. Ex: A Younger Person has longer to recover losses so can handle higher risk in the long run.

Investment Half Sheet (5 minutes)

INSURANCE NOTES Day 145 April 24, 2015

Risk Risk is the uncertainty about a situation’s outcome This can be an unpredictable event which leads to loss or damage

Insurance Terminology Insurance is an arrangement between an individual (consumer) and an insurer (insurance company) to protect the individual against risk Help cover the risk. A policy is a contract between the individual and the insurer specifying the terms of the insurance arrangements Written agreement to buy specific coverage

Insurance Terminology A policyholder is a consumer who purchases the policy A premium is a fee paid to the insurer to be covered under specified terms This can be monthly or every 6 months A deductible is the amount paid out of pocket by the policy holder for the initial portion of a loss before the insurance coverage begins What you pay if something happens

How Insurance is Calculated Insurers use statistics and probability to calculate how much you should pay based on a number of variables. Age Gender Location History Desired Coverage Desired Deductible

Types of Insurance Types of insurance can include: Automobile (Required for Drivers) Health (Required by The Affordable Health Care Act) Life Disability Homeowners/Renters And More!

Automobile Insurance Types There are four types of coverage for Automobile Insurance: Liability insurance Medical payment insurance Uninsured or underinsured motorists insurance Physical damage insurance Collision Comprehensive

Liability Insurance Liability Insurance covers the insured if injuries or damages are caused to other people or their property It is the minimum amount of insurance required by law for automobiles

Medical Payment insurance Medical Payment Insurance covers injuries sustained by the driver of the insured vehicle or any passenger regardless of fault It also covers family members injured as passengers or if injured as a pedestrian

Uninsured motorists insurance Uninsured or Underinsured Motorists Insurance covers injury or damage to the driver, passengers, or the vehicle caused by a driver with insufficient insurance

Physical damage insurance Physical Damage Insurance covers damages caused to the vehicle Collision – covers a collision with another object, car, or from a rollover Comprehensive – covers all physical damage losses except collision and other specified losses