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* Take Charge of Your Finances 1.10.1.G1
07/16/96 Insurance Take Charge of Your Finances G1 *
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Risk, Responsibility, Reality
This video clip gives an overview of insurance policies Risk, Responsibility, Reality Video Clip
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Risk Risk is the uncertainty about a situation’s outcome
This can be unpredictable events which lead to loss or damage
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Insurance Terminology
Insurance is an arrangement between an individual (consumer) and an insurer (insurance company) to protect the individual against risk A policy is a contract between the individual and the insurer specifying the terms of the insurance arrangements
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Insurance Terminology
A policyholder is a consumer who purchases the policy A premium is a fee paid to the insurer to be covered under specified terms A deductible is the amount paid out of pocket by the policy holder for the initial portion of a loss before the insurance coverage begins
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Types of Insurance Types of insurance can include: Automobile Health
Life Disability Homeowners/Renters
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Automobile Insurance Automobile Insurance is an arrangement between an individual (consumer) and insurer (insurance company) to protect the individual against risk from automobile accidents
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Automobile Insurance Types
There are four types of coverage for Automobile Insurance: Liability insurance Medical payment insurance Uninsured or underinsured motorists insurance Physical damage insurance Collision Comprehensive
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Liability Insurance Liability Insurance covers the insured if injuries or damages are caused to other people or their property. It is the minimum amount of insurance required by law for automobiles
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Medical Payment insurance
Medical Payment Insurance covers injuries sustained by the driver of the insured vehicle or any passenger regardless of fault It also covers family members injured as passengers or if injured as a pedestrian
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Uninsured motorists insurance
Uninsured or Underinsured Motorists Insurance covers injury or damage to the driver, passengers, or the vehicle caused by a driver with insufficient insurance
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Physical damage insurance
Physical Damage Insurance covers damages caused to the vehicle Collision – covers a collision with another object, car, or from a rollover Comprehensive – covers all physical damage losses except collision and other specified losses
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Health Insurance In 2005 there were nearly 47 million Americans or 16 percent of the population without health insurance ( ) Health insurance provides protection against financial losses resulting from injury, illness, and disability Health insurance may cover hospital, surgical, dental, vision, long-term care, prescription, or other major expenditures Health insurance may be purchased by the individual or through their employer
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Life Insurance Life insurance is a contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insured’s death The contract is a policy which states the amount to be paid to the beneficiary upon the insured person’s death
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Life Insurance A beneficiary is the recipient of any policy proceeds if the insured person dies A dependent is a person who relies on someone else financially
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What Covers This Risk? You hit and injure a pedestrian in a crosswalk
Automobile!
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What Covers This Risk? After losing her husband to a heart attack, the wife is left alone to care for 2 children Life!
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What Covers This Risk? You need a cast after breaking an ankle while roller-blading Health!
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Disability Insurance Disability Insurance replaces a portion of one’s income if they become unable to work due to illness or injury
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Homeowner’s/Renter’s Insurance
Homeowner’s Insurance combines property and liability insurance into one policy to protect a home from damage costs due to perils. A peril is an event which can cause a financial loss like fire, falling trees, lightning and others
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Property Insurance Property Insurance protects the insured from financial losses due to destruction or damage to property or possessions Liability Insurance protects the insured party from being held liable for other’s financial losses Homeowner’s insurance should cover the replacement cost which will pay to rebuild the home if it is completely destroyed
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Renter’s Insurance Renter’s Insurance protects the insured from loss of the contents of the dwelling rather than the dwelling itself Renter’s insurance may be provided by a parent or guardian while an individual is still a full time student or under the age of 18 However, each policy is different and should be inspected by the policy holder
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What Covers This Risk? You apartment is broken into and your computer is stolen Renters!
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What Covers This Risk? You are injured in an automobile accident and are unable to work for 2 months Disability!
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What Covers This Risk? Your garage was destroyed by a fire which started by a lightning bolt hitting your home Homeowners!
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Conclusion Review the following terms and concepts: Risk Insurance
Policy Policyholder Premium Deductible Types of Insurance
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What Covers This Risk? Sick at home from food poisoning after eating a carnival corndog Nothing!
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What Covers This Risk? You have brake failure. You hit a telephone pole and cause damage to the front of the car Automobile!
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What Covers This Risk? You get pulled over and receive a speeding ticket on your way to the mall Nothing!
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What Covers This Risk? A daughter, who is financially responsible for her mother’s nursing home bills, dies from an undetected heart defect Life!
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What Covers This Risk? A doctor diagnoses a child with tonsillitis during a visit to a clinic Health!
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