1. Risks and Insurance SS.8.FL.6.1 Analyze the fact that personal financial risk exists when unexpected events can damage health, income, property, wealth, or future opportunities. Gr. 5 Financial Literacy

2. Grade 5 Financial Literacy SS.8.FL.6.1 How can you alter your actions to reduce/eliminate risks? How does insurance help protect us from risk? Essential Questions

3. Grade 5 Financial Literacy SS.8.FL.6.1 Image Source: http://www.glasbergen.com/? count=3&s=insurance136baaa Image Source: https://s-media-cache- ak0.pinimg.com/236x/20/ec/4b/20ec4b740bcf9e6abcc f68e67fc57c31.jpg What information can be gained by analyzing the cartoons? (LAFS.5.RI.3.7)

4. Grade 5 Financial Literacy SS.8.FL.6.1 Students learn the basics of insurance and begin to understand the role insurance can play in the various stages of their lives. Risks are the possible things that could happen. Usually when we use this word, we are talking about negative things. Risks are like consequences. Many people think of risk only as involving things that are considered dangerous. In reality, risk is a part of everyday life. It’s just that some risks are greater or more obvious than others. For example, which of these two activities makes you think of risk: walking down stairs or motorcycle racing? Motorcycle racing is generally considered higher risk than walking down stairs. But what if there is water on the stairs, if your shoes are untied, or if the stairs are in bad shape? Risks are a part of everyday life.

5. Grade 5 Financial Literacy SS.8.FL.6.1 Some general categories of risk that we face might be: Risk that comes with action : skateboarding, driving, eating junk food all the time Risk that comes with lack of action : not wearing a seatbelt, failing to study for a test Risks you know about but don’t think will happen to you : getting struck by a car Everyday risks worth taking : trying out for the soccer or basketball teams; introducing yourself to a person you would like to know; public speaking, etc. General Categories of Risk

6. Grade 5 Financial Literacy SS.8.FL.6.1 Think about the risks below. Classify each type of risk and describe ways to protect yourself. The Risk What can Happen Type of Risk Ways to Protect/Prevent TYPES OF RISK 1.Risk that comes with action. 2.Risk that comes with lack of action. 3.Risks you know about but don’t think will happen to you. 4. Everyday risks worth taking. Risks & Consequences Leaving door of house unlocked Lack of Action Theft/Burglary Texting while driving Car Accident Action Smoking Cigarettes Illness/Bodily Harm Action Not attending to stovetop Property Damage, Injury Lack of Action

7. Grade 5 Financial Literacy SS.8.FL.6.1 How do we protect ourselves from risk? It is impossible to eliminate all risk from our lives. But there are things we can do to protect ourselves and reduce the chance of bad things happening:. Ways to Protect/Prevent Risk Preventing RiskExamples Avoid dangerous situations and activities. Use protective devices and preventive measures. Arming yourself with knowledge. Have the facts and skills that enable you to make good decisions. Have insurance. Protect yourself from financial loss due to illness, injury, death, property damage and loss.

8. Grade 5 Financial Literacy SS.8.FL.6.1 Insurance We buy insurance to help protect our valuable possessions. Insurance is a promised payment for a specific potential loss. What that means is that when you buy insurance, you are having money put aside to pay you later if something were to happen in the future. Home/Car/Property Medical Life/Disability How Insurance Works Insurance is based on the principle of shared risk, or risk pooling. The money from your premium is put together with the premiums of many other people. That large pool of money is used to pay for losses suffered by individual members of the group. YOU PAY A PREMIUM THEY PAY FOR LOSS

9. Grade 5 Financial Literacy SS.8.FL.6.1 Soldiers in Ancient Rome understood the concept of shared risk and insurance. In those days, soldiers ledged to take care of the families of their fellow warriors who died in battle. Each soldier would contribute a little bit of money to help a family that suffered a loss. These soldiers were practicing risk pooling. The National Insurance Act of 1911 introduced the concept of subsidized health care which both employers and employees would contribute to. As a result, workers gained access to free healthcare, sick and maternity leave. By 1913, 2.3 million were insured for unemployment benefit and 15 million insured for sickness benefit. Though today’s insurance policies are more sophisticated, its risk pooling premise has remained the same. Insurance throughout History

10. Grade 5 Financial Literacy SS.8.FL.6.1 Insurance premiums refers to the price you pay for insurance. Insurance companies figure out how much to charge you or someone else by measuring risks. They have to estimate how many accidents, illnesses, or deaths there will be within a certain group of policyholders. This is where math techniques, such as probability and statistics, come in handy. Insurance Premiums & Factors Determining Risks AGE GENDER HEALTH Your premiums will be higher if the insurance company feels you are at greater risk. Younger people are usually charged _______ than older people for life insurance because they are statistically less likely to die. less Younger people are usually charged _________ than older people for auto insurance because they are statistically less likely to get into an accident. more Life insurance premiums for males are usually __________ than females because women live an average of six years longer than men. more Young men pay __________ for automobile insurance than young women because they are statistically more likely to have an accident. more A person with a preexisting medical condition pays ________ for health insurance because they are statistically more likely to need more medical care. more

11. Grade 5 Financial Literacy SS.8.FL.6.1 Who Pays More? Explain why. Home located in an area with high crime. PROPERTY INSURANCE Home located in an area with low crime Home with storm shutters. Home without storm shutters. Driver with previous accidents/traffic citations. AUTO INSURANCE Driver without a history of accidents/traffic citations. High theft automobile. Low theft automobile. Luxury vehicle. Standard vehicle. LIFE INSURANCE An individual with no health concerns. An overweight individual that smokes. A movie stunt double. A school teacher.

12. Grade 5 Financial Literacy SS.8.FL.6.1

13. Grade 5 Financial Literacy SS.8.FL.6.1 Image Source: http://www.glasbergen.com/? count=3&s=insurance136baaa Image Source: https://s-media-cache- ak0.pinimg.com/236x/20/ec/4b/20ec4b740bcf9e6abcc f68e67fc57c31.jpg What information can be gained by analyzing the cartoons? (LAFS.5.RI.3.7)

14. Sources & Supplemental Resources Life Happens Lesson Resources from Scholastic http://www.scholastic.com/nextgeneration/lessons&worksheets/risk.htm http://www.scholastic.com/nextgeneration/pdf/Risk_The-411-on-Risk.pdf Lesson content adapted from PwC’s Earn your Future Curriculum – Risk Management and Insurance – Grade 3-5 Lesson https://www.pwc.com/us/en/about-us/corporate-responsibility/corporate- responsibility-report-2011/community/financial-literacy-curriculum-pdfs/8-risk- management-3-5/1-pwc-risk-management-3-5-lesson.pdf Lesson Plans & Teacher Guide on Risks and Insurance: Scholastic Education http://www.scholastic.com/nextgeneration/lessons&worksheets/risk.htm http://www.scholastic.com/nextgeneration/pdf/risk-ed-guide.pdf Grade 5 Financial Literacy SS.8.FL.6.1