1. What is Insurance?

2. An arrangement between an Insurance Company and an individual to protect someone/something. Insurance: Provides Protection from almost anything that can happen Based on the concept of risk and loss Gives you Peace of mind knowing that you will NOT lose everything

3. How does the idea of risk work… Lots of policy holders… All share the risk… When one of them loses… Everyone's money helps pay to replace/rebuild/etc…

4. An Illustration of How Insurance Works Suppose there are 100 people in a health insurance group Insurance shifts the risk of big loss from the individual to the insurance company With a 1% chance that any one of them could get sick and require $10,000 in medical care But, no one knows who will get sick If each person pays $100 into a “pool” they will collectively have $10,000 to cover the medical costs of the person who gets sick So, everyone gives up $100, but nobody loses more than $100 99 people do not collect anything, but they gain peace of mind and important protection against a large loss

5. How does Insurance work? You purchase a policy A contract between the insurance company and the insured that states the exact terms of the policy

6. 1. Pay Premium Each month/ year you have a set amount that you pay the Insurance Company for your policy (based on the type of insurance you get)

7. Determining your insurance premiums is based on several things… Grab a marker and brainstorm on the whiteboard one answer per person… initial next to yours. Can’t repeat if someone put your answer up there already… Go!

8. Determining your insurance premiums is based on several things… Age Gender Marital Status Condition Driving Record Credit History/Score Grades Type of Insurance Terms of the Policy Deductible Location Health Habits (smoking, risky behavior)

9. 2. Need to use your Insurance You will file a claim with your Insurance company. Claim – a formal request to an insurance company asking for a payment when the policyholder has an accident, illness or injury

10. 3. You may need to pay a “Deductible” Deductible – the out-of-pocket money paid by the policyholder before an insurance company will cover the remaining costs attributed to the loss

11. If I pay my deductible, do I owe more? Yes, sorry. Yes, sorry. Co-insurance – requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid Co-insurance – requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid Yes, sorry. Yes, sorry. Co-insurance – requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid Co-insurance – requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid

12. Louise’s Accident Louise has a health insurance policy with a $500 deductible and 20% co-insurance this means then Even with insurance Louise still needs funds to pay the deductible and co- insurance what if… What would Louise’s options have been if she did not have insurance? Louise pays the first $500 of any covered medical care plus 20% of the remaining costs Louise is in an accident resulting in a $5,000 medical procedure that is covered by insurance Louise pays $500 + 20% of the remaining $4,500 for a total of $1,400 The insurance company pays $3,600

13. You do the Math! Carlos was involved in an automobile accident that resulted in $3,788 worth of damage to his car. How much does Carlos pay and how much does the insurance organization pay? Carlos has a property and liability insurance policy with a $500 deductible and 0% co-insurance How much does Carlos pay? How much does his insurance organization pay? $500 $3,288

14. Which Insurance policy would you choose? Janet wants to make sure she has the best health insurance policy. She shopped around and received multiple quotes. What are the pros and cons of each policy? Current PolicyNew Policy Premium amount/month Deductible amount Co-insurance amount 20% owed by policyholder 80% owed by insurance organization 0% owed by policyholder 100% owed by insurance organization $300$200 $2000

15. 4. The Insurance company pays… Sometimes this can take a while They may have you pay the bill and reimburse you They might need proof of your replacement

16. Types of Insurance

17. What are some things that I can Insure? House Car Life/Health Possessions Pets/Animals Job/Income and a lot more…

18. Property & Liability Insurance Two parts Property insurance - payment to insured person if his/her property is damaged or destroyed by an accident Liability insurance - payment to others if a member of the insured household accidently causes harm to other people or property Pays for loss to insured person Pays for injury or loss to others Provided by individuals

19. Types of Property & liability Insurance Automobile insurance - payment for liability and property insurance on a vehicle Homeowners insurance - payment to cover liability losses and damage/loss of home structure and its contents Renters insurance - payment for damage/loss of property in a rental unit in addition to liability losses If a person drives an automobile, automobile liability insurance is required by law

20. Trivia Question When talking about Car insurance.. Who pays the highest rates? (meaning they are the most risky?) Teenage male drivers

21. Health What things does this cover? How long can you be covered by your parents’ policy?

22. Life When you die money that will be given to your beneficiary Beneficiary – person who gets the money when you die. Usually for covering burial expenses.

23. Disability/Accidental Covers you if you are injured and not able to work. – Replaces your income – Covers injury expenses (from on the job) – Any medical bills from being hurt while working Cover Leave for medical reasons – Maternity leave Accidental Insurance (Aflac) – Separate but is similar

24. What Covers This Risk? You are having a baby and need medical care Health Insurance

25. What Covers This Risk? You are unable to work for six months and need help paying your expenses while you’re out of work Disability Insurance

26. What Covers This Risk? You are elderly and need assistance from medical professionals to continue living at home Long-term Care Insurance

27. What Covers This Risk? Your home is destroyed by a tornado and you need to rebuild Property Insurance Specifically Homeowners

28. What Covers This Risk? The car you are driving causes an accident that injures someone else Liability Insurance Specifically Automobile

29. What Covers This Risk? A sudden death of a family member results in loss of income Life Insurance

30. Which insurance do you use… You back into another car by accident and cause damage to both vehicles. You fall off a ladder and break your arm, you will still be able to work. Another car hits you, they have insurance. Your Uncle Floyd dies.