Property Insurance

Insuring Your Valuable Property The main causes of property damage are accidents, theft, and vandalism. You can protect yourself from financial loss on your property with property insurance.

Types of Property Insurance Real property is property attached to land, like a house, business, garage, or other building.

Types of Property Insurance Personal property consists of possessions that can be moved, like furniture, jewelry, and electronic equipment.

Renter’s Insurance Renter’s insurance can cover any loss or damage to your personal possessions.

Standard Fire Policy Fires account for 85 percent of all property damage in the United States. A Standard fire policy insures against damage due to fire or lightning.

Standard Fire Policy Extended coverage protects against damage from riots, car or airplane crashes, windstorms, hail, and even explosions.

Liability Protection Liability insurance protects you from the costs of injuries to others on your property.

The Homeowner’s Policy Many insurance companies offer a combination policy with different kinds of home protection called a homeowner’s policy.

The Homeowner’s Policy The eleven perils are the most common causes of property damage or loss.

The Homeowner’s Policy The eleven perils include: Fire Smoke Windstorms Vehicles Riots Theft Vandalism Breaking glass

Additional Coverage The federal government offers low- cost flood insurance through the National Flood Insurance Program.

Amount of Insurance For homeowners, insurance companies recommend that you insure your home for 80 percent of its market value.

Amount of Insurance Since real estate tends to increase in value, you might also need to increase your coverage every few years.

Amount of Insurance You can insure property for either its actual cash value or its replacement value. The replacement value is the full cost of repairing or replacing the property, regardless of the depreciation value.

Preventive Measures If you install deadbolts and burglar alarms to prevent theft, your insurance will be lower. Your rates will be lower if you have smoke detectors, fire extinguishers, or sprinklers in your home.

Life and Health Insurance

Life Insurance Life insurance protects the standard of living of the survivors of a policyholder. At the policyholder’s death, the insurance company pays survivors the face value of a life insurance policy.

Life Insurance The money paid to the survivors is called the proceeds. Each person who receives part of the proceeds is a called a beneficiary.

Whole Life Insurance With whole life insurance, a policyholder pays a premium that stays the same throughout his or her lifetime.

Limited-Payment Life Insurance Limited-payment life insurance is a second form of cash-value insurance. The policyholder pays premiums for a certain number of years.

Limited-Payment Life Insurance One popular type of limited-payment life insurance is “paid up at age 65.” Since many people retire at age 65, they won’t have to pay premiums after their paychecks stop.

Endowment Insurance An endowment policy is based more on savings than on death benefits. It provides coverage for a specific period of time, usually 20 to 30 years.

Endowment Insurance The proceeds go to the policyholder if he or she is still alive at the end of that period. If the policyholder dies during the endowment period, the beneficiary receives the proceeds.

Term Insurance Term insurance covers a person for a specific period of time. It pays benefits only if the insured dies during the term of the policy.

Term Insurance Term insurance is sometimes called “pure protection,” since it’s used only to pay death benefits and doesn’t build cash value. The major advantage of term insurance is its low cost.

Term Insurance Workers or their companies usually pay less for a group policy than for individual policies.

Costs of Life Insurance Some of the factors that affect the cost of the premium on life insurance are: Age Health Occupation

Health Insurance The average cost of a stay in the hospital is $5,000 per day. Health insurance provides protection against the costs of illness and accidents.

Major Medical Insurance Major medical insurance, sometimes called catastrophe insurance, is the most important coverage for a serious illness or accident.

Hospital Expense Insurance Some policies set a limit for each specific expense. Others set a maximum amount per day for up to a maximum number of days.

Surgical Expense Insurance Surgical expense insurance pays part of a surgeon’s entire fee for an operation. Most policies set a maximum payment for a particular surgical expense.

Medical Expense Insurance Medical expense insurance covers the costs of a doctor’s care not involving surgery. This insurance is usually bought with hospital and surgical expense insurance.

Group Health Insurance A health maintenance organization (HMO) provides health care at its own health center for a fixed fee per month.

Group Health Insurance With an HMO, you must go to its own clinic. You must choose a doctor from its network.

Medicare Medicare is a major health insurance program set up by the federal government.

Medicaid Medicaid is another government health care plan for certain groups of citizens. Medicaid provides care for those who are unable to pay for insurance or health care.

Medicaid The coverage Medicaid provides is much more comprehensive than Medicare.

Costs of Health Insurance Many policies require a copayment, or a fee paid each time a service is used.

Costs of Health Insurance Many policies won’t cover a pre- existing condition, which is a serious health condition diagnosed before a person obtained health insurance.