1. Mrs. Karen Swope Single Survival Columbian High School
INSURANCE
Mrs. Karen Swope
Single Survival
Columbian High School

2. Basic Insurance Terms:
Insurance - promised payment for protection against specific future loss.
Insurer - the company that pays the policyholder for losses, as long as the premium is paid.
Premium - the fee one pays for an insurance policy. It may be paid monthly, quarterly, semi-annually, or yearly. The more protection the higher the premium.

3. Insurance Terms cont.:
Policy - the contract between the insurance company and you the policyholder. The policy states all the terms of the coverage.
Policy rider - extra protection added to the policy.
Liability - the legal responsibility for another’s financial loss due to your negligence.

4. Insurance Terms cont.:
Deductible - the amount of money the insured person must pay before the insurance company pays any money.
Co-pay - a form of cost sharing; the insured pays a fixed dollar amount for medical services.
Co-insurance - a form of cost sharing; the insured pays a set percentage of the medical expense.

5. Kinds of Insurance
What types of insurance coverage should a responsible adult have?
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1. Automobile
2. Life
3. Health
4. Homeowners/ Renter’s
*** Having insurance (all types) is important in preventing financial ruin due to loss of property, loss of life, loss of health, and liability.

6. Auto Insurance
Financial Responsibility Law- is required in all states, driver must prove they can pay for any damages or injuries they may cause in an auto accident.
Costs of Auto Insurance: type of car, home address, driver classification.

7. Auto Insurance Coverage
Bodily injury: includes medical payments and bodily injury liability.
Uninsured motorists protection- covers bodily injuries to you/your family.
Property damage liability
Collision
Comprehensive physical damage

8. Reducing Car Insurance Costs:
Keep driving record clean
Get good grades
If possible, use multiple vehicle discount
Drive fewer miles than average, if possible.
Choose a higher deductible on the policy
Comparison shop for the best rates.

9. Who needs life insurance the most?

10. Kinds of life Insurance
There are many varieties of life insurance.
Most fall into three broad categories
TERM
WHOLE LIFE or PERMANENT
UNIVERSAL

11. TERM Life Insurance For what period of time is protection provided?
* for a specified period of time - ex. 10 yrs
Do the premiums change over the life of the policy?
* premiums are low at the start and go up with each new term.

12. TERM Life Insurance cont.
Why might the premiums vary?
* the premiums go up as the insured gets older
What are the other benefits for this type?
* low premiums making it affordable
* can be converted to whole life
* best form to cover a mortgage

13. Whole Life or Permanent:
For what period of time is protection provided?
* it is permanent, until death of the insured
Do the premiums change over the life of the policy?
* they are fixed; they stay the same the entire time

14. Whole Life or Permanent cont:
What are the other benefits for this type?
* fixed death benefits
* has a cash value ( a savings component)
* earnings are not taxed until withdrawn
* may take a loan against the policy

15. UNIVERSAL Life Insurance
For what period of time is protection provided?
* protection is permanent, until death of the insured
Do the premiums change?
* flexible, start out low then increase

16. UNIVERSAL Life Insurance cont.
Why do the premiums vary?
* the insured may pay more to increase the cash value
* may go up as the insured ages
What are the other benefits?
* has a cash value, not taxed until used.
* cash value can increase with market values

17. Health Insurance
Protects you from monetary losses associated with illness or injury.
Why is healthcare so expensive?
Basic medical insurance covers hospital expenses, some medications, X-rays, lab tests and some doctor’s fees.
Major Medical covers large losses due to major illness or serious injury.

18. Health Insurance cont: Group vs Individual
Group health insurance is usually provided by an employer.
Group insurance provides better coverage for lower cost than for individual insurance.
HMO - Health Maintenance Organization
PPO - Preferred Provider Organization
Both HMO’s and PPO’s are groups of doctors and hospitals that provide services to it’s members for a given fee. When services are needed you must select a doctor/hospital within the network.

19. Affordable Care Act Affordable Care Act: (Obamacare) 3/31/2014
For families or individuals who are uninsured
Must be enrolled by 3/31 to avoid tax penalties
many health insurance options to choose from under Obamacare

20. Government Assistance Health Programs
Medicaid: federally funded health care for low income people.
Children’s Health Insurance Program (CHIP): 1997, state funded healthcare program for uninsured children.
Medicare: health coverage for people over age 65.

21. Homeowners Insurance
Covers your home (structure) and your personal property (contents).
Provides liability protection (your legal responsibilities to others)
What is covered?
Structure: covers damages to the home/ structure.
Contents: theft, vandalism, fire, smoke, lightening, wind, hail
Liability: covers your legal defense in case of a lawsuit, pays medical bills of person injured while on your property.

22. Renter’s Insurance:
Covers your personal belongings while renting a living space.
Provides liability insurance if someone is injured while in your rented space, covers their medical bills, covers your legal defense in a lawsuit.

23. Summary Protect your assets by purchasing insurance.
Most individuals will need to cover the following insurance: auto, life, health, and homeowners/renters.
The amount of insurance needed depends on the value of the asset and how much risk the individual is able to absorb. You choose the coverage and limits of the coverage.
The higher the deductible the lower the premium.
Insurance should be a part of one’s financial foundation.