1. Warm Up
What role is fulfilled by transactions in checking and savings accounts?
Give two examples of transactions that are credits into an account.
Give two examples of transactions that are debits from an account.

2. Insurance: Choices and risks
PFL Unit 5.3

3. I. Why do people need insurance?
Choices & Risk
All choices involve risk
You cannot always prevent accidents
Insurance –protects you from unexpected expenses
Insurance companies –charge a fee (a premium) paid by customers to provide protection from certain kinds of loss

4. D. You buy a policy from the company
Small monthly payment
Pays out when you make a claim
Usually requires a co-pay or deductible be paid first

6. II. Types of Insurance Auto Insurance
Liability Insurance –covers the cost of property damage and injuries caused by the policy owner
50/100/25
$50,000 for bodily injury to one individual
$100,000 for injury to everyone in the accident
$25,000 for property damage
Collision Insurance –repair or replacement
Comprehensive Insurance –property damage caused by something other than an accident
Typically insured drivers have a $500 Deductible (You pay that, then insurance pays the rest)

7. III. How insurance companies set prices
1. Personal characteristics
Age
Sex
Marital status
Personal habits
Type and frequency of vehicle use
2. Geographic location
‘Rural’ usually lowers rates
‘urban’ usually raises rates

8. 4. Vehicle characteristics
*The most expensive person to insure is a 16 year old male with a new car! Sorry, Guys!!
3. Driving record
Accident with death, bodily injury, or property damage
Number and kind of moving violations
4. Vehicle characteristics
Damage, repair, and theft record of type and model of car
Value and age of car

9. Health Insurance –provides payment for certain health care costs such as doctor visits, and hospitalization
1. Co-pay –point of service payment (ex: $25.00 per doctor’s visit
2. Deductible –amount you must cover before your policy will cover the rest of the bill (ex: surgeries, physical therapy)

10. V. Life Insurance –Provides financial protection to dependents of the policy owner upon death
Often purchased by adults with children or a spouse who doesn’t work or earns less
Term Life – fixed premiums for coverage are for a set number of years (ex: 20 years)
Whole Life - fixed premiums for coverage are for the entire time coverage is desired (you can pay until you die)

11. Close What factors should one look at when buying insurance?
What are the three most frequently purchased types of insurance?
Prioritize which type of insurance you would buy. 1. 2. 3.
Explain your choice.