INSURANCE Introduction to Business and Marketing

Today’s Objectives  Distinguish between real and personal property.  Identify the purposes and major types of insurance

Real Property  The ground and everything permanently attached to it  Includes buildings, fences, trees, soil, rocks, minerals, etc.

Personal Property  Everything other than real property that can be owned  Includes moveable objects and intangible property

Insurance is an agreement in which one party (insurer) compensates another party (insured) for any losses. Purpose – protect individuals and businesses against losses by spreading the risks of loss among a large number of people Types of Insurance

Insurance Basics  Insurance Policy – written contract between the buyer of insurance (insured / policy holder) and the insurance company (insurer)  Premium – amount of money the policyholder pays for insurance coverage; usually a monthly fee  Proceeds – payments by the insurer for losses covered in a policy  Beneficiary – person named to receive the proceeds

Property Insurance  Covers damage or destruction of property  Types of insurance include:  Car  Home  Boat  Personal items

Automobile Insurance  Drivers are legally required to carry liability insurance  Liability insurance covers claims for damages or injuries made against a policyholder

Homeowner’s / Renter’s  Protects against loss of both real and personal property  Includes fire, wind, vandalism, burglary, and injuries suffered by others while on the property  Usually does not include flood damage

Life Insurance  Provides compensation for losses due to a person’s death  Cost of insurance is based on risk

Health Insurance  Basic health insurance provides for inpatient & outpatient hospital care, physician care, surgery, and prescription drugs  Most people receive group insurance from their employer

Government Health Care  Medicare is a federally funded health insurance program for people who are covered by Social Security.  Medicaid is a health care plan for low- income people.

Disability Insurance  Pays benefits if the policyholder cannot work because of a disability  Many employers provide basic disability insurance  Short-term and long- term plans available