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Insurance Jeopardy ® Joan Koonce, Ph.D., AFC ® Extension Financial Planning Specialist.

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Presentation on theme: "Insurance Jeopardy ® Joan Koonce, Ph.D., AFC ® Extension Financial Planning Specialist."— Presentation transcript:

1 Insurance Jeopardy ® Joan Koonce, Ph.D., AFC ® Extension Financial Planning Specialist

2 Terminology & Concepts Health & Disability Insurance Life Insurance Property & Liability Insurance Other/ Supplemental Insurance

3 back This is the dollar amount you pay towards your expenses before the insurance company pays their portion. What is the deductible? Terminology & Concepts - 100

4 back This is the percent of your expenses you pay after the deductible. What is coinsurance? Terminology & Concepts - 200

5 back Many insurance companies will not cover these until after a waiting period has expired. What are pre-existing conditions? Terminology & Concepts - 300

6 back This provision in an insurance policy puts a limit on the total amount you will pay out of pocket for your loss. What is a coinsurance cap or stop-loss provision? Terminology & Concepts - 400

7 back This provision in an insurance contract prevents you from being reimbursed for more than 100 percent of your loss. What is a coordination of benefits clause? Terminology & Concepts - 500

8 back You use this type of account to pay for medical expenses with pre-tax dollars. What is a flexible spending account? Health & Disability - 100

9 back This is the most liberal definition of disability found in disability income insurance contracts. What is own occupation? Health & Disability - 200

10 back Long-term care insurance companies assess the need for long-term care by using these as benefit triggers. What are Activities of Daily Living (ADLs)? Health & Disability - 300

11 back This type of health insurance plan costs more but provides you with the greatest choices of doctors. What is fee-for-service or indemnity plan? Health & Disability - 400

12 back These health care plans limit your choice of doctors. Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) are in this category. What are managed health care plans? Health & Disability - 500

13 back Because it is temporary insurance protection and has no savings component, it costs less than other types of life insurance. What is term life insurance? Life Insurance - 100

14 back Doing this will cause the death benefit of a life insurance policy to be less than the original face value when purchased. What is taking out a policy loan? Life Insurance - 200

15 back Lump sum, interest only and life annuity are examples. What are settlement options? Life Insurance - 300

16 back This feature in a life insurance policy allows you to exchange a term life insurance policy for one that has a cash value. What is a convertibility feature? Life Insurance - 400

17 back These two types of life insurance have a savings component and allow you to choose your own investments. What is variable life and variable-universal life? Life Insurance - 500

18 back 25/50/25 What is the minimum amount of automobile bodily injury/property damage liability coverage required in Georgia? Property & Liability - 100

19 back This type of automobile insurance covers your losses if you are hit by a hit-and-run driver. What is uninsured/underinsured motorist coverage? Property & Liability - 200

20 back When purchasing homeowners insurance to cover your home, this is uninsurable. What is land? Property & Liability - 300

21 back You add these to your standard homeowners policy to increase coverage on items that are inadequately covered. What are floaters? Property & Liability - 400

22 back These two types of automobile insurance coverage are required by lenders. What is collision and comprehensive? Property & Liability - 500

23 back Low-income, blind or elderly persons can obtain health care through this program funded by the state and federal government. What is Medicaid? Other/Supplemental - 100

24 back This type of insurance only covers specific illnesses or accidents. What is dread disease and accident insurance? Other/Supplemental - 200

25 back It is a type of insurance that must be purchased if you dont pay at least 20 percent down when purchasing a home. What is private mortgage insurance? Other/Supplemental - 300

26 back This coverage pays for the difference between the vehicles value and what you may still owe on the loan. What is gap insurance? Other/Supplemental - 400

27 back People purchase these types of insurance to pay off their mortgage in the event of their death and make their mortgage payment if they become disabled. What is credit (mortgage) life and credit (mortgage) disability income insurance? Other/Supplemental - 500

28 back Insurance Terminology and Concepts Risk –The uncertainty that you will incur a financial loss and the uncertainty regarding the size of the financial loss Pure Risk Speculative Risk

29 back Insurance Terminology and Concepts Ways to Manage Risk –Avoid risk Example: Dont drive –Reduce risk Example: Wear seat belts –Retain or accept risk Example: Pay all or a portion of the loss –Transfer or share risk Example: Purchase insurance

30 back Insurance Terminology and Concepts Premium Deductible Coinsurance Co-payment Coinsurance Cap or Stop-Loss Provision Pre-existing Conditions Waiting Period Policy Limits Policy Provisions Coordination-of-benefits Clause

31 back Insurance Terminology and Concepts Types of Insurance –Health, Disability Income and Long-Term Care Insurance –Life Insurance –Property and Liability Insurance Automobile insurance Homeowners insurance Personal umbrella liability insurance

32 back Health Insurance Major Types of Health Care Coverage –Basic health insurance Hospital insurance Surgical insurance Medical expense insurance –Major medical insurance

33 back Health Care Plans Private Health Care Plans Government-Sponsored Health Care Plans

34 back Private Health Care Plans Fee-For-Service or Traditional Indemnity Plans Managed Health Care Plans –Health maintenance organizations (HMOs) –Preferred provider organizations (PPOs)

35 back Government-Sponsored Health Care Plans Medicaid Medicare Workers Compensation

36 back Medical Flexible Spending Accounts These accounts allow you to pay for medical expenses with pre-tax dollars. Money put into the account is used to pay for un-reimbursed medical expenses. Some expenses are not eligible for coverage. You either use the money or lose it.

37 back Disability Insurance Disability income insurance replaces 60 to 80 percent of your income if you are unable to work due to an illness or injury. –Own versus any occupation –Residual clause –Benefit period –Elimination (waiting) period –Short-term versus long-term disability

38 back Long-Term Care Insurance Long-term care services are provided when a person cannot perform certain activities of daily living (ADLs) and/or is cognitively impaired. What does long-term care insurance cover? –Skilled, intermediate and custodial care –Home care services, physical therapy, homemakers, home health aides –Assisted living, adult daycare, other care in the community – Alternate care (other physician recommended services) –Respite care for the caregiver –These accounts allow you to pay for medical expenses with pre-tax dollars.

39 back Life Insurance Terms Face Value: the benefit due upon death Insured: the person whose life is covered by the policy Policyholder or Policy Owner: the individual or business that pays for and owns the policy Beneficiary: the recipient of the benefit upon the death of the insured

40 back Two Basic Types of Life Insurance Term Insurance Cash-Value Insurance –

41 back Types of Cash-Value Life Insurance Whole Life Insurance Universal Life Insurance Variable Life Insurance Variable-Universal Life Insurance –

42 back Life Insurance Clauses Incontestability Clause –Places a time limit, usually two years, on the right of the insurance company to deny a claim based on information provided in the application Suicide Clause –Gives the insurance company the right to deny a claim if the inured dies by suicide within a certain period of time, usually two years

43 back Life Insurance Settlement Options Lump-Sum Settlement Interest-Only Settlement Period-Certain Settlement Installment-Certain Settlement Life-Annuity or Life Income Settlement

44 back Types of Automobile Insurance Bodily Injury and Property Damage Liability –Required coverage in the amount of 25/50/25 in Georgia Medical Payments

45 back Types of Automobile Insurance Uninsured and Underinsured Motorist Bodily Injury and Property Damage Collision and Comprehensive –Deductibles apply to this coverage –Required by lenders if your car is financed

46 back Types of Automobile Insurance No-Fault Insurance –Only available in no-fault states –Your insurance pays for your losses and their insurance pays for their losses – no legal battles.

47 back Homeowners Insurance Terms Replacement Cost/Value: the amount necessary to repair, rebuild or replace an asset at todays prices Current Market Value (CMV): Original purchase price minus depreciation, also referred to as actual cash value Floater Policies Inflation Protection Endorsement

48 back Six Basic Forms of Homeowners Insurance Basic Forms of Homeowners Insurance –Broad Form Homeowners Insurance –Special Form Homeowners Insurance –Renters Insurance –Condominium Owners Insurance –Older Homes Homeowners Insurance Policies differ based on the type of property, amount of coverage and number of perils (events that cause a loss such as fire, tornado, etc.) covered.

49 back Homeowners Insurance Coverage Property –Home –Other detached buildings –Personal property –Landscaping –Loss of use Liability –Comprehensive personal liability –No-fault medical payments –No-fault property damage

50 back Personal Umbrella Liability Insurance Covers liability costs after the underlying automobile and homeowners policies have been exhausted Standard amount of coverage is $1 million although higher amounts can be purchased

51 back Other/Supplemental Insurance Dental and Vision Insurance Dread Disease and Accident Health and Life Insurance Private Mortgage Insurance Gap Insurance – Credit Life and Disability Income Insurance Childrens Life Insurance


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