Presentation on theme: "7.01: Classify types of health and life insurance and features of types of coverage. PERSONAL FINANCE."— Presentation transcript:
1 7.01: Classify types of health and life insurance and features of types of coverage. PERSONAL FINANCE
2 JOURNAL ENTRY Have you been at risk today? What are some risks to which you have been subjected?When has your family used insurance to recover from a form of loss or damage?
3 REVIEWReview highlights about homeowner’s and auto insurance in objectives 6.02 and 6.03.In objective 7.01, YOU will learn about two other very important forms of insurance---health and life insurance.
4 KWL– Journal EntryList what YOU know about health and life insurance in the “K” column.Share one fact YOU have listed.Write questions YOU want answered in the “W” column.
5 Life is full of risks and accidents. People are at risk for getting injured while playing sports, riding in a car, or living in a house.Risk is uncertainty about a situation’s outcome.Risk can be unpredictable events that lead to loss or damage. Insurance is an arrangement between an individual (consumer) and an insurer (insurance company) to protect the individual against risk.Insurance plays a large role in most individual’s financial management plans.In 2007, the United States spent $7,421 on health care for each man, woman, and child in the population.The purpose of insurance is to help individuals limit their financial losses when an accident occurs. It helps the individual to be prepared for the unexpected.
6 ActivityAppendix 7.01A, “How Does Insurance Work?”
7 Need to Know To purchase insurance, consumers purchase a policy. A policy is a contract between the individual and the insurer specifying the terms of the insurance arrangements.A policyholder is the consumer who purchased the policy.The policy will state the premium and deductible amounts.A premium is the fee paid to the insurer to be covered under the specified terms.A deductible is the amount paid out of pocket by the policy holder for the initial portion of a loss before the insurance coverage begins.The amount of a premium or a deductible will vary depending on the type of insurance and the terms of the policy.
9 Sources of Health Insurance EmployerEmployers pay part or all the cost of a group health insurance plan as a benefit to their employees. Costs are generally lower as risk is spread over a large groupPrivateIndividuals purchase a policy to cover health costs for themselves or their immediate family. Greater flexibility in types of plan, but costs are higherGovernmentState or federal government managed insurance paid from tax revenues. Must meet age and/or income qualifications
10 Managed Health Care Plans HMO - Health maintenance organizationa health care group that provides health care services to members for a set fee and a small co-payHSA – Health Savings AccountYou contribute pre-tax dollars to the account for expected medical expenses for the coming year –-submit claims and receipts for reimbursement up to amount depositedPPO - Preferred provider organizationan agreement between health providers with employers or insurers to provide services at a reduced rate to employeesPOS-Point of Servicemembers use a primary physician who refers them as needed to participating specialist or members can see non-participating specialist members but, members pay more for their servicesFee for ServiceA plan in which an insured can select his/her own doctors and hospitals, pay costs at time of visit, and file form with insurance company for reimbursement of covered expenses
11 Terms to KnowDeductible – the amount you pay during the term (usually one year) before the insurance pays any medical expensesCo-payments – Percentage of medical bills you must pay after meeting your deductible. Usually 10, 20 or 30% of the billPreauthorization – prior approval is required from the insurance company before major medical procedures are done. (e.g. surgery, chemotherapy)Exclusions – medical expenses the policy will not cover (e.g. teen pregnancy, cosmetic surgery)
12 Terms to Know, continued Pre-existing Condiitions---An illness or injury that a person has at the time he/she enrolls in a health care planRenewability---A patient’s right to restart coverage annuallyMaximum Benefit---A limit on the number of days one’s care will be covered, or the highest amount that can be paid in benefits for a specific procedure t
13 Types of Health Insurance Basic medicalpay a large part of hospital and surgical care, may also pay part of some other medical expenses (e.g., doctor’s visits)Major medicalpays for long-term illness expenses after basic medical benefits limits have been reached (e.g., cancer).
14 Other Types of Health Related Insurance Coverage Dental InsurancePays for all or part of checkups which include examination, cleaning, and X-raysPays a portion or repairs such as fillings, crowns, and root canalsOffered with group rates through some employersVision InsurancePays for checkupsCovers a portion of the cost of lenses and framesAccident Insurance (e.g. School Insurance)Often available at low ratesCovers medical bills related to injury occurring at eligible locations and/or times (e.g. school grounds, sports events)
15 Types of Disability Insurance Pays a portion of income lost to a worker who is unable to return to work for an extended period of time because of illness or injuryShop carefully as costs and benefits vary widelyWorkmen’s CompensationEmployers are require to have in every state in some formCovers medical care, treatment, rehabilitation, and a portion of wages from injuries that occur in the workplaceLong TermPays for care when a person with a chronic illness or injury cannot care for themselves for an extended period of time
16 Government Sponsored Health Insurance MedicareCovers eligible citizens 65 or older or eligible adults who can no longer work due to illness or disabilityFunded from payroll taxesMedicaidHealth insurance for eligible low income personsFunded from state and federal tax revenueCHIP – Children’s Health Insurance ProgramHealth insurance for children under 18 whose parents make too much to qualify for medicaid, but not enough to afford private insuranceFederal funds are distributed by the state
17 Gap Insurance COBRA Medigap Insurance Consolidated Omnibus Budget Reconciliation ActLaw that gives you the right to continue employer sponsored group health insurance plan for a limited time after you leave your job. You pay the premiums.Medigap InsurancePrivate insurance available to citizens 65 and older who have Medicare A and B plans.Covers the cost of co-payments and deductibles
18 Activity Appendix 7.01D, “Health Insurance Graphic Organizer.” Use Objective 7.01 PowerPoint, “Health Insurance.” --- complete information about each type of health insurance in the boxes on the graphic organizer.
19 ActivityDistribute Appendix 7.01F, “Who Will Pay?” Follow the teacher directions at the top of the appendix for preparing materials for the option chosen.Use Appendix 7.01G, “Who Will Pay? ---Answer Key” to discuss answers.
20 ActivityDivide students into teams. Distribute Appendix 7.01E, “Types of Life Insurance Policies.” Have half of the teams research the types of term life insurance and the other half research the types of whole life insurance using the internet. Give students minutes to fill in the assigned information. Repair teams so a term and whole life are now paired. Give them 10 minutes to share what they learned and finish filling out the graphic organizer.
21 Things that affect the cost of life insurance Family health historyPre-existing conditionsThe policyholder’s current healthThe policyholder’s occupation and hobbies (e.g. race car driver)Gender (women live longer than men and pay lower premiums)Age of insured (the older the insured, the more the premiums cost)
22 Things (risks) to consider when selecting the amount of insurance coverage: Present and future earnings of the policyholderFinancial responsibilities of the policyholderPotential income from other sourcesDependents, their ages and their needsBurial expensesDebts
23 ActivityAs a Math-to-Life Connection, have students work in teams of two to complete Appendix 7.01H, “How Much Term Costs.” Remind students to calculate the total cost over the period of time insured. Remind students to keep risk factors and things that affect premium costs in mind as they answer questions 4 through 6. Use Appendix 7.01I, “How Much Term Costs Key”, to check the answers.
24 ActivityAsk students to give a real life example of the above types of risks. Discuss until all points are covered. Distribute Appendix 7.01J “More or Less” or display as a visual. Have students work in teams of two to decide which scenario in each row carries the greater degree of risk.
25 KWL—Journal EntryGo back to the KWL pageComplete the L