UNIT VII – Personal Financial Literacy

Every decision we make involves some type of risk Driving can result in an accident A house can burn down after you purchase it Playing a sport can lead to injuries These threats to your safety can happen at any time and are often unexpected The best way to prepare is to purchase insurance

Provides financial protection against losses caused by an auto accident or other damage to a car Examples of Coverage Collision – provides for repair/replacement of policy owner’s car damage Liability – covers cost of property damage or injuries to others caused by policy owner Comprehensive – covers damage that is a result of fire, flood, and theft

Provides payment for certain health-care costs including coverage for dental and vision care Examples of Coverage Traditional – provides reimbursement for medical expenses; plans included deductibles and copays HMOs – cover medical services through a specific group of physicians; monthly fee regardless of whether services are used or not HSA (Health Savings Accounts) – provide pre-tax accounts for medical costs

Provides financial protection in case of loss of personal possessions in a rental unit, as well as injury to others on the property Protection against financial loss from damage to your home or its contents, as well as injury to others on the property

Provides financial protection to dependents of policy owner when policy owner dies (to cover such expenses as income replacement, debt repayment, funeral expenses, and education expenses) Provides income over a specified period when a person is ill and unable to work; most disability policies end at retirement age (65-70)