insurance preparing for life’s unexpected events
TRANSCRIPT
INSURANCE
Preparing for Life’s Unexpected Events
How It Works
• You pay an agreed-upon amount of money to an insurance company
• The company pays for losses caused by accidents, theft, or injuries
http://www.youtube.com/watch?v=6HNKqffU3Cc
Insurance Terms
• Insurance Policy –– legal contract between a person buying
insurance (a policyholder) and the insurance company
• Who is covered• Types of losses the company will pay• Amounts the company will pay• The cost of the insurance
Insurance Terms
• Agent~– The representative of an
insurance company who sells policies
• Insurance Coverage –– losses that an insurance
company agrees to cover • (this is an actual dollar amount)
• Deductibles –– the portion of a loss that
you pay before the insurance company pays the remainder
Insurance Terms
Premium –the amount a policyholder pays an insurance company
(can pay in installments)
Insurance Terms
• Claim –– an oral or written notice to the insurance
company
Automobile Insurance
http://www.youtube.com/watch?v=2Mjaj_3UEl4&feature=related
Auto Insurance-Types of Coverage
• Standard automobile insurance policy = several different kinds of coverage
• Each type covers a different kind of loss, damage, or injury
Males Ages 16 – 25 have the highest car insurance
rates!
Liability Insurance
• Damage or injury for which YOU are responsible– Driver and passengers in the other car– Passengers in your car
• Does not cover your injuries or property damage to your car
• Shown as 250/500/50– $250,000 for any one person– $500,000 for all injuries to other people– $50,000 for damage to another person’s
property
Medical Payments Insurance• Covers medical and funeral expenses for you, your family
members, and other passengers in your car
• Does not matter who caused the accident
• Most cover up to $5,000/person
• Jamal breaks his arm in a car accident and has to go to the emergency room. His total bill is $740.37. His insurance pays 85% of the bill. How much is Jamal responsible for paying? – $111.06
Collision Insurance
• Covers the cost of repairs to your car if the accident is YOUR fault
• Covers damage to your car if you’re in an accident caused by a driver who is not insured
Comprehensive Insurance
• Covers your car for reasons other than a collision– Theft, fire, vandalism, wind, hail, floods
• May exclude some items that are easy to steal (cell phone)
Uninsured/Underinsured Coverage
• Pays medical and damage expenses for you and your passengers caused by a driver without insurance or too little to cover loss.
• Does not cover the other driver
Buying Auto Insurance
• Shop Around
• Drive carefully-Safe Driver Discounts
• Buy only the coverage you need
• Raise your deductibles
• Take advantage of insurance discounts
Health & Life Insurance
Major Medical Coverage• It covers:
– Hospital and surgical expenses– Doctor visits– Prescription drugs– Medical tests
• Requires deductible and coinsurance
• You choose any hospital and physician you prefer
• Tim recently stayed in the hospital. His health insurance policy pays 70% of his hospital bills after a $700.00 deductible is met. The total of the hospital costs were $21,500.00. What were Tim’s total payments after the deductible? – $6,240.00
Health Maintenance Organization (HMO)
• No deductibles
• Small co-payment
• Check-ups and well-baby care are covered
• Choice of physicians is limited
Preferred Provider Organization (PPO)
• More freedom of choice of doctors
• Higher premiums
• Higher co-payments than with an HMO
Types of Plans
• Group Plans– Offered through employers– Keep premium costs down (spreading risk
over large number of people)– Have deductible, coinsurance, major
medical coverage
• Individual Plans– Students, self-employed, retirees– Can be expensive!
Disability Coverage• Pays you a percentage of your salary if you can not work
• Short-term disability=few months
• Long-term disability can pay for a lifetime of missed work
Types of Life Insurance
• Term Life Insurance– Protects your dependents if you die– No cash value– Provide coverage for a set number of
years– The beneficiary receives the face value
of the policy if you die
Buying Life Insurance
• You purchase a policy and pay premiums
• The company pays a benefit to your beneficiary if you die
• Should you buy life insurance?
• How much life insurance do you need?
• What are some tips on buying life insurance?
Home Insurance
• Renter’s Insurance– Protects your
belongings to a set amount
• Homeowner’s Insurance– Protects your house
and it’s contents
• The Centrino’s have homeowner’s insurance that pays 60% after a $600 deductible is met. After a recent storm, the Centrino’s filed a claim to replace their roof. The roof costs $2,000.00 to replace. What was the insurance company’s payment in this case?– $840.00