1. Types of Insurance
Advanced Level

2. Why is It important to have insurance?
Emergency savings - at least six months of expenses set aside to cover costs of unexpected expenses
Risk - chance of loss from an event that cannot be entirely controlled
is managed by
Insurance – a financial product purchased by many people facing a similar risk to protect against the risk of larger losses
What are examples of unexpected events that may result in a financial loss?

3. Insurance Policy
Policy - A contract between the insurance company and the insured that states the exact terms of the policy
Coverage - The risks covered and amount of money paid for losses under an insurance policy
Policyholder - Person who owns the insurance policy
Premium - Money paid to purchase the policy
Experts say that buying insurance is buying financial security. Do you think this is true? Why or why not?

4. The Insurance Process
Claim – a formal request to an insurance company asking for a payment when the policyholder has an accident, illness or injury
Event occurs resulting in loss
Deductible – the out-of-pocket money paid by the policyholder before an insurance company will cover the remaining costs attributed to the loss
Remaining amount owed is paid by co-insurance (if applicable)
Policyholder makes claim to insurance organization
Co-insurance – requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid
Insurance organization determines if event is covered by policy
If so, policyholder pays a deductible

5. Sources of Insurance Employer Individual Government
In most cases, individuals acquire insurance from a combination of sources
Long-term care, property and liability insurance
Employer
Special programs for those who qualify and during catastrophes
Health, disability, and occasionally life insurance
Individual
Government
If an employer does not provide insurance, it may be acquired individually

6. Employer Provided Insurance
Employee benefits - products or services that add extra value for employees beyond earned wages
Insurance premiums paid by…
In-kind income – the donation of a product or service in place of cash
Employer
Employee
Payroll deduction
Policies may be available to the employee’s family members (usually for additional fees)
No income taxes are paid on the in-kind income