1. Life is Risky How to protect yourself

2. What are some things that can go wrong? You can’t work  Divorce/separation  Laid off / fired  Incompetence  Do something wrong  Sickness Injury  Company closes  Skills obsolete Other issues  Fire / flood  Family illness  Tree falls on your house  Car accident  Robbery  Sick pet  Freak accident

3. How can you protect yourself and your loved ones? Insurance Renters / Homeowner’s InsuranceRenters / Homeowner’s Insurance Auto insuranceAuto insurance DisabilityDisability Health insuranceHealth insurance Life insuranceLife insurance Living willsLiving wills Insurance will protect you from bankruptcy when unexpected things happen.

4. Terms to Know Beneficiary Liability Tort Rider Deductible Insurance agent / agency Insurance Bundling Premium Appraisal Replacement cost

5. Renter’s Insurance Covers the cost of your “stuff” or “personal property” when you rent the place your life. Clothes Furniture Food Make up Musical instruments Sports equipment Books / textbooks May need more coverage for flood or earthquake More at esurance and NSSIesuranceNSSI

6. Homeowner’s Insurance Covered for damage to your home and damage to your property. Make sure you have the guaranteed replacement cost, not the actual cash value (ACV) Dwelling Contents Other structures (sheds, pool or spa, garage, etc.) Loss of Use coverage pays for you to live somewhere else until your home is livable. Liability – protects you from lawsuits against your property in the event someone sues you Umbrella liability covers home and motor vehicles for $1 million or more

7. Homeowner’s Insurance Additional coverage. Each policy has a maximum amount it will cover for certain things such as clothes, and musical instruments. You can add a rider for additional coverage if your replacement costs exceed that amount. Ex: Your policy may cover up to $500 for musical instruments, and the total replacement value of your guitars is $2000. Schedule your valuables for specific coverage Jewelry, fine art, fire arms, etc. Get appraisals Schedule each items separately according to the appraisal amount Things that are not covered by most policies Floods, earthquakes, sewer backups

8. Disability Insurance Provides some income for you when you are sick or inured and cannot work. Some states require you to have disability insurance. The premium is deducted as a withholding tax from your paycheck. Elimination or Waiting Period – how much time passes between the onset of the disability and when you start collecting (30 days, 90 days) Benefit period – maximum during of payment while your are disabled (2 or 5 years) Total vs. partial disability

9. Health Insurance Government Insurance Medicare (seniors) Medicaid (welfare) Private Insurance Individual plans Group plans (through work or another organization) o Cobra plans allow you to keep your group insurance for up to 18 months after your leave the group but you have to pay the premium.

10. Types of Health Insurance 1. Indemnity plan (fee-for-service) Usually the insurance pays 80%, you pay 20% co- insurance plus a yearly deductible ($250 – 2500). 2. Preferred Provider Organization (PPO) Negotiates discounts with doctors who are in-network. You make a co-payment for each doctor visit plus a co- insurance and pay a yearly deductible Out-of-network doctor visits will cost you more. 3. Health Maintenance Organization (HMO) Not health insurance but health care / managed care Most routine procedures covered with low co-pays Only covers in-contract doctors and specialists

11. Alternatives to Health Insurance 1. Consumer driven health plans Higher deductibles – lower premiums 2. Health savings accounts Allow you to save money to meet future healthcare expenses 3. Shared medical costs groups Individuals contribute to help others with their medical expenses on the expectation that their expenses will be covered later on.

12. Auto Insurance Types of coverage 1. Liability Coverage pays for damage you or someone driving your car cause to other people or their property (state mandated insurance) Bodily injury liability Property damage liability 2. Medical payments coverage 3. Personal Injury Protection (PIP) 4. Uninsured and Underinsured Motorist Coverage 5. Collision Insurance Coverage

13. Auto Insurance Types of coverage 6. Comprehensive Insurance Coverage (fire, theft, vandalism, and other losses not covered by collision insurance. 7. Towing and Emergency Road Service 8. Rental Reimbursement Full and Partial Tort Full tort means there is no limit on your right to sue someone else if you are in an accident Partial tort limits your right to use

14. Full vs. Limited Tort

15. Life Insurance Benefits those you leave behind  How much? Enough to cover burial expenses, medical expenses, living expenses for beneficiaries Future expenses, i.e. college for your children  Term insurance – last a specific amount of time Shorter amount of time means lower premium Payment amount will be assessed at renewal  Whole life (permanent) insurance – lasts for your lifetime Sometimes can be borrowed against Costs more than term  Some Companies have policies on their employees

16. Wills and Living Wills A will is written to allocate your assets to the those you specify in case of your demise. A living will protects your wishes if you become incapacitated and cannot speak for yourself. Example: Do not resuscitate (DNR) Can make your loved ones feel less guilty if they have to make a tough decision about your care. You may also want a “health care power of attorney” to grant someone else the right to speak for you if you cannot speak for yourself.

17. Today’s Assignment Go back up to Slide 4, Terms to Know. On a piece of paper, write the definition of each term. Write it in your OWN WORDS so that you know you know what is means.Slide 4, Terms to Know Please hand it in before you leave today..

18. Other kinds of insurance 0 Vacation insurance 0 Pet insurance