1. MoneyCounts: A Financial Literacy Series
Insurance Planning
11-A Grange Building
University Park, PA 16802
financialliteracy.psu.edu

2. Description
Insurance eases financial burdens that can occur when disaster strikes.
Insurance planning is to get a group to contribute financially to a fund specifically designed to help individuals recover in the case of an unexpected loss. 

3. Learning Outcome
Understand the purposes and processes of insurance planning
Discuss diverse types of insurance and think about what you need
Discuss the ways of maintaining proper coverage but reducing insurance cost

4. Purposes of insurance planning
Identify and analyze risk factors in life
Seek proper coverage to attain a peace of mind if disaster strikes
Transfer risk from an individual to a company
Reduce the uncertainty of risk via pooling
Insurance Planning

5. Appropriate plans for YOU
Each person has different insurance needs tied to his/her unique situation
Insurance planning is a  fluid process, never stagnant or frozen in time

6. Appropriate plans for YOU
Age
Family
Health
Economic Status
Assets
Profession

7. Types of Insurance Health & Medical Disability & Long-term Care
Mortgage & Asset/Liability
Business
Life

8. Health and Medical Insurance
Usually (not always) available through employment
Many individuals have to seek private insurance
For you and your family
Most employers offer a choice between HMO (health maintenance organization) and TFSC (traditional fee service care)
The cheaper the plan, the more the constraints are imposed on the consumer

9. Disability & long-term care insurance
To replace a portion of your lost income when you are unable to work for an extended period of time
Cover the high cost of medical services for the elderly
Watch for cancellable versus non- cancellable policies

10. Life insurance
Critical for individuals with family members to protect upon one's loss of life
Surviving children, spouse, or other dependents can use the funds to maintain their standard of living, protect loss of assets, or repay debt
The amount you would need is dependent on your family situation and what you aim to protect

11. Mortgage & other asset/liability insurance
Not only to protect the asset, but also to protect the creditors in case of loss or need for replacement of the asset
Owners, as well as renters, can also get insurance
Based on your personal situation including personal, lawsuit, or umbrella liability coverage

12. Business insurance
If you are self-employed, you would need to cover not only yourself, your family, and your loved ones, but also your business
Many options available after you decide which risks you need to insure (based on your tolerance for risk)

13. Key terms
Comprehensive means the policy covers all unless specifically excluded in the policy contract. 
Premium is the money that the policyholder pays periodically for insurance coverage reflecting an expectation of loss
Deductible means what is paid by the policyholder and is usually a portion of the insured loss

14. Reduce insurance cost
Take time to fully understand each policy, ask questions, and compare alternatives
Shop for insurance to protect your assets (home, car, boat, jewelry, belongings, etc.)
Stay within your medical network whenever possible (approved providers and facilities)
Explore high deductible plans, but increase your emergency fund to balance
Avoid emergency room visits whenever possible
Ask your doctor for less expensive facilities whenever possible
Switch to generic drugs (compare ingredients) and use preferred pharmacies
Get free preventive care
Participate in wellness programs and keep good health
Check to see if you qualify and participate in HSA (health saving plan) and FSA (flexible spending plan)

15. Ask questions before making decisions
Is this procedure necessary?
How can I pay?
Do you have a second opinion?
Is there a discount for cash payment?
What is the roots of this aliment?
What are the side effects of the medication? Any better, cheaper alternatives?
Can I switch to generic medication?
Do you accept my insurance plan?
Can I get the quotes of different insurance plans?
Can I receive an itemized bill?

16. Forecast your insurance budget
5. Review for governmental assistance as applicable for each age bracket and explore other private options.
3. Project your goals for each by adjusting, deleting, and adding insurance needs for each column.
2. Prepare columns by increments of 10 years, using your current age as a starting point.
1. List all of your current insurances and indicate the type and cost for each as a starting point.
Current insurances
Health/medical: A plan - $$
Life: B plan - $$
Mortgage: F plan - $$
6. Calculate an average for your insurance budget needs for each decade of your life. 20 30 40 50 60 70 80 90
100
Goal
4. Assign a dollar amount cost for each forecasted insurance need. $$
Governmental assistant
(calculate)
Budget needs

17. MoneyCounts: A Financial Literacy Series
Comments and questions
11A Grange Building
University Park, PA 16802
financialliteracy.psu.edu