Insurance Ways to deal with personal and financial loss…

But first… A quick quiz to see how much you already know!

True or False? Automobile accidents are the most common cause of death among teenagers TRUE! Because they are more likely than other groups to be in automobile accidents, teenagers pay a higher rate for automobile insurance.

True or False? Smokers pay the same amount for life insurance as non-smokers FALSE! Smokers typically pay more over the course of their lifetimes for life insurance because their chance of dying before nonsmokers is statistically greater.

True or False? On average, women live longer than men TRUE! Women live about seven years longer than men. That’s why life insurance rates for women are often lower than for men.

True or False? Students who have health care coverage through their parents risk losing it when they leave high school or college TRUE! Most insurance companies only cover teenagers after high school if they continually attend college full time (up to age 23)

True or False? On average each American spends a whopping $1000 a year on health care FALSE! In 2007, the average yearly cost of health care per person was $7,600 ($3,300 out of pocket)

True or False? Only people born with disabilities need disability insurance FALSE! The main purpose of disability insurance is to replace lost income. It can help any person who is unexpectedly injured or sick and unable to go to work.

How did you do? We are now going to look at: Common insurance terms YOU NEED TO KNOW Common insurance terms YOU NEED TO KNOW The different types of insurance you may need in your lifetime The different types of insurance you may need in your lifetime

Insurance Terms Liability: Bodily injury or property damage you have caused another Claim: Demand by an individual to recover losses covered by insurance Premium: Payment to the insurance company for coverage Deductible: Amount the insured must pay before the insurance company pays

Higher Deductible = Lower Premium Example: You have a $1000 car insurance DEDUCTIBLE and unfortunately just got into a car accident…(oops!) You will have to pay $1000 BEFORE the insurance company covers the rest. If the damage is less than $1000, the insurance company will not cover any of the damage. You will have to pay $1000 BEFORE the insurance company covers the rest. If the damage is less than $1000, the insurance company will not cover any of the damage. The benefit of this is that your MONTHLY PREMUIM will be LOWER (since the insurance company will ultimately spend less money on your claims)

Lower Deductible = Higher Premium Example: You have a LOWER DEDUCTIBLE ($100) and get into that same car accident… You will only have to pay $100 before the insurance company covers the rest of the damage. This also means that they will cover much smaller amounts of damage (scratches, small dents) assuming the damage costs over $100 to repair. However, if you have a lower deductible, then the insurance company will increase your MONTHLY PREMIUM to compensate for the increased cost/frequency of your claims.

Life Insurance “It is not for the person who dies, it is for the ones who are left” Life Insurance protects a family’s way of life Life Insurance protects a family’s way of life - Spouses - Dependents - Cost of the funeral  How much should you get? - Enough to replace income - Pay for time off of work for loved ones - Other - College for the kids? - Pay off the house?

Medical/Health Insurance  Helps cover the costs associated with medical care (doctor visits, prescriptions, etc) - May be partially covered by employer - Individual policies are available (but are more expensive) - Students are probably covered by parents’ policy while in school (up to age 23) - Amounts covered vary by plan, read the fine print before choosing!

Disability Insurance  Insures your earning power (loss of income because of illness or accident) - Usually ½ to 2/3 of your salary - Often covered by employer - if accident happens at work site - Can be purchased individually - for accidents that happen on personal time

Homeowners/Renters Insurance Homeowners: - Covers the buildings, garage, property, contents - Covers the buildings, garage, property, contents - May require additional “riders” for damages caused by floods, earthquakes, etc. - May require additional “riders” for damages caused by floods, earthquakes, etc.Renters - Renters do not own the building, so insurance covers your belongings and liability - Renters do not own the building, so insurance covers your belongings and liability - Usually less than $15/month!!! - Usually less than $15/month!!!

Auto Insurance Terms - Collision: - Covers damage to car resulting from collision to another car, object or rollover - Comprehensive: - This covers loss or damage that doesn't involve a collision. (neighbor's kid hits a baseball through your windshield) - Property Damage Liability: - Damage to another person’s property caused when you’re driving - Bodily Injury Liability: - This will cover the injuries that you cause in an accident - Uninsured Motorist Coverage: - Just like it sounds. Covers you (and your car) if the person who hit you doesn't have insurance. - Personal Injury Protection: - This will pay to treat the injuries and provide for the lost wages of you and your passengers if in an accident.

What affects the cost of car insurance? - # of Accidents/Tickets - Kinds of Accidents/Tickets - Type of Car - Color of Car - Age of Driver - Sex of Driver - Credit History - Anti-Theft Systems - Safety Features (airbags) - Grades (Good Student Discount) - Married vs. Single - Drivers Ed

Now… - Turn to the student next to you - Tell them 3 facts about insurance that you didn’t know before today! How can you use this information in the future?