1. Personal Insurance and Employee Benefits
Coach Johnson
Understanding Business and Personal Law

2. Vocabulary Insurance Insurer Policy Policy Holder Insured Beneficiary
Rider
Insurable Interest
Premium
Face Value
Case Value
Life Insurance
Straight Life Insurance (Whole)
Annuity
Term Insurance
Endowment Insurance
HMO
Medicare
Medicaid

3. What is Insurance? Contractual Agreement
Prevents Loss
Indemnify- pay for a parties loss (make good)
Insurer (Company: State Farm, Geico, etc)
Covered or Protected Party- Insured
Beneficiary- Recipient of amount to be paid
Policy- Written Contract of Insurance (Binder before)
Face Value- Maximum paid out
Premium- What you pay for the insurance

4. Life Insurance Pays a beneficiary after death of policy holder
Three common types of life insurance
Term
Specific time period
Cheapest form (why?)
Increase at end of term (why?)
Whole Life
Paid throughout entire life
Payments never increase (why?)
Gains cash value (why?)
Endowment Life
Specific amount and time
Paid at end of term or to beneficiary (if you die before)
Also: Accidental Death and Dismemberment Insurance
Pays face value if you die in accident (to beneficiary)
Pays other amounts based on disabilities

5. Disability Insurance Paid when workers are “not able” to work
Only pays a % of your normal pay
Pay premiums to private company through employer
Physical or Mental
Two Major Types:
Short Term
Pregnancy
Minor Injury
Long Term
Major Injury
Permanent disability

6. Disability Examples
These are considered severe enough to meet the test of disability:
Loss of both arms, both legs, or a leg and an arm
Heart and lung disease
Progressive cancer
Brain damage that results in loss of judgment or memory
Loss of vision, inability to speak, deafness

7. Health Insurance Basic Health Insurance covers:
Inpatient and outpatient hospital care
Physician Care (Doctor’s Visit)
Surgery
Prescription Drugs
Dental and Vision (sometimes separate)
Major Medical (must be added)
Pays for expenses beyond normal charges (long stay, terminal illness)

8. Insurance Information
Group Plans
Purchased by individuals who work for companies
Usually cheaper (why?)
Sometimes employee pays part of premium
COBRA
Keeps employees insured after loss of job
Individual Plans
Covers same thing as group policies
More expensive

9. More Insurance?? Three major types of Policies
HMO (Health Maintenance Organization)
Members include doctors, insurance companies, labor unions, corporations
Must choose from list of providers
Larger Network, Lower Coverage
PPO
Will cover only part costs if out of network (provider)
Smaller Network, Higher Coverage
HRA (Health Reimbursement Account or Arrangement)
Account pays for medical costs up to a certain amount
You pay full out of pocket costs until deductable is reached
After, it pays normal %

10. Government Healthcare
Medicare
Over 65 years of age
Covered by Social Security
Part A- inpatient hospital care
Part B- 80% of doctors’ and other medical
Medicaid
Low income people
Funded by state and federal funds