Unit 3: Financial Planning and Insurance Chapter 9: Insurance Unit 3: Financial Planning and Insurance

Explore Examine the charts, graphics, and reading excerpts in Chapter 9: Insurance. Make a list of questions you would like to have answered as we go through the chapter.

Introduction WB: Before You Begin, pgs. 186-187 Journal: Review the Learning Outcome objectives and Key Terms Complete the “Before” column on the “Measure Your Progress” chart Journal: What do you think is the purpose of insurance?

Protecting Your Wealth Section 1

The Role of Insurance in Your Financial Plan Video 1.1 (8 minutes): The Role of Insurance in Your Financial Plan Journal: Explain why insurance is an important part of your financial plan.

Discussion Questions Explain the role of insurance in your financial plan. Insurance transfers the financial risk of major catastrophes, thereby protecting your wealth. Why is it important to understand that insurance is a financial product? Because, as with the purchase of any consumer product, you must be an informed and wise consumer. If you have a full emergency fund, what is the best way to keep your premiums down? Raise your deductible.

Basic Types of Coverage Section 2

Basic Parts of Auto Insurance Video 2.1 (8 minutes): Basic Types of Auto Insurance Journal: What are some ways you can save on your car insurance? Read: Need another reason to pay cash for your car? (p. 191) Top things to know about auto insurance. (p. 193)

Discussion Questions What is the purpose of liability insurance protection? Liability covers the medical costs and/or property damage of the other person when you are at fault or if the accident occurs on your property. Why do you need to have comprehensive coverage on your vehicle in addition to collision? Comprehensive coverage takes care of damage to your car not caused by a collision – if you car is stolen, damaged by flood, hail, etc.

Activity Activity: Auto Liability Limits (20 minutes) Understanding Renter’s Insurance (15 minutes)

Health Insurance Video 2.2 (10 minutes): Health Insurance Journal: Explain why having health insurance is important even if you are young and happy.

Discussion Questions What are the basic components of health insurance? Basic health, major medical expense, dental, optical, copayments, and deductibles.

Activity Activity: Health Plan Overview (25 minutes)

Long-Term Care Insurance Video 2.3 (7 minutes): Long-term Care Insurance Journal: At what stage of life will the cost of your healthcare needs be most expensive?

Discussion Questions What is the purpose of long-term care insurance? Long-term car covers nursing home, assisted-living facilities or in-home care if you are no longer able to perform everyday tasks by yourself.

Disability Insurance Video 2.4 (13 minutes) – Disability Insurance Journal: Explain why identity theft protection is so important.

Discussion Questions What is the purpose of disability insurance? Designed to replace income lost due to a short-term or permanent disability. What is the purpose of identity theft protection? ID theft protection provides restoration services that assign a counselor who is able to clean up the financial aftermath of ID theft. What is the most affordable way to get disability insurance? Through your employer.

Activity Activity: Which insurance policies are needed? (25 minutes)

Employer Benefits and Retirement Plans Section 3

The Importance of Life Insurance Video 3.1 (10 minutes): The importance of life insurance Journal: Which type of life insurance is the better option, term or cash value? Explain your answer. Read: The purpose and importance of estate planning. (pg. 201)

Discussion Questions What is the purpose of life insurance? Life insurance is intended to replace lost income in the event of someone’s death. The income replacement is necessary for anyone who was dependent (children and/or spouse) on that person’s income. What type of life insurance does Dave recommend? Only have a low cost, level term life insurance policy.

Activity Activity: What’s With the Will? (45 minutes)

Insurance to Avoid Section 4

Insurance to Avoid Video 4.1: Bad ideas in the insurance world. (7 minutes) Journal: What is duplicate coverage and why should you avoid it?

Discussion Questions What are some unnecessary types of insurance? Duplicate coverage; any insurance that covers an expense that you could handle financially (pet, television, etc.) How does someone become self-insured? Follow the five foundations, manage your money in a way that allows you to build wealth over your lifetime. You’ll eventually have a large nest egg and life insurance will no longer be necessary.

Activity Activity: Identifying Financial Risk (30 minutes)

Chapter Summary Budget Builder – foundationsU.com/8 Take Action Challenge, pg. 181 Study Guide: Money in Review, pgs. 182-183 Complete the “After” column on the “Measure Your Progress” chart, pg. 163.