auto, homeowners, medical and life insurance dollars and sense
TRANSCRIPT
Auto, Homeowners, Medical and Life
InsuranceDollars and Sense
Copyright
Copyright © Texas Education Agency, 2014. All rights reserved.
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What is Insurance?
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Terms to Know
Appraisal
Asset
Beneficiary
Cash value
Co-pay
Death benefit
Deductible
Estate
Face amount
Group insurance
Open-enrollment period
Premium
Supplemental insurance
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Why is Insurance Needed?
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Auto Insurance
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Auto InsuranceTypes of Insurance Available Collision Coverage Comprehensive Coverage Liability Coverage Medical Payments Coverage Personal Injury Protection Rental Reimbursement Coverage Towing and Labor Coverage Uninsured Motorist
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What Does Collision Coverage Pay?
Pays the cost of repairing or replacing your car after an accident regardless of who was driving or who was at fault
Payment is limited to cash value of car minus your deductible
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What does Comprehensive Insurance Pay?
It pays damage to a car caused by fire, vandalism, hail or other events besides collision.
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What Does Liability Pay?
Texas law requires 30/60/25 Liability protects you from
lawsuits and pays other people’s expenses caused by accidents. Medical / funeral Car repair or replacement Rental car during repair Punitive damages Attorney fees
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What Does Personal Injury Protection (PIP) Cover?
Medical payments or funeral expenses for you, your family members and passengers in the car
80% of lost income and cost of hiring a caregiver
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Rental Reimbursement and Towing and Labor Coverage
Rental reimbursement pays a set amount for a rental car while your cr is repaired or for a specific time if it is stolen.
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What Does Uninsured Motorist Pay?
Bodily injuryProperty damageCovers you, your family
members and passengers in your car, as well as others driving your car with permission
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Factors That Affect Auto Insurance Rates Type and level of coverage needed
Age and driving experience
Gender
Model of the car
Where you live
Vehicle use
Driving record, grades and insurance history
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Ways to Lower Your Premium Bundle auto and homeowners policies with the same
company
Buy a vehicle that is not a target for theft
Ask for a higher deductible
Decrease your liability coverage
Have features such as airbags, anti-lock brakes and anti-theft devices
Place teens as occasional drivers on your least expensive car
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Homeowners Insurance
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Homeowners Insurance
Homeowners insurance - covers the home and the contents of the home
Property coverage
Liability coverage
Appraisal
Renters insurance
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Factors That Affect the Cost of Home Insurance Type and amount of coverage
Size of the deductible
Risk factor where you live
The insurance company
Opportunity for discounts
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Medical Insurance
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The Importance of Medical Insurance
Medical insurance provides payment to cover financial loss as a result of illness or injury.
Medical care is expensive, so adequate health insurance is an important component of your financial plan.
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Sources of Medical Insurance Two Government Programs
Medicare for individuals over 65 years of age or disabled individuals who qualify for social security
Medicaid-for low-income individuals that covers blind, disabled and needy families with dependent children
Employer-provided insurance where there is a group plan and the employer covers some or most of the cost
Private insurance where a person purchases health insurance through a private company
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Indemnity Plans versus Managed Care Indemnity plans
allow participants to seek health care from any qualified medical provider
Managed care plans limit participants to a specific list of providers
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Family Coverage The person who buys
the policy or subscribes to it through an employer is known as the policyholder.
Children become ineligible when they reach a certain age.
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Group Plans
Group plans cover a large group of individuals, such as all the employees of a particular company or local government.
Within a group, individuals’risk is spread across the entire pool of members.
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Location Restrictions
Some insurance companies will only provide medical care in the United States.
You may want to purchase travel insurance if you travel outside the United States.
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Pre-existing Conditions
Insurance policies may exclude coverage for pre-existing conditions or health conditions that existed before the policy was granted.
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Deductibles Many policies limit the total amount they will
pay for some procedures
Some companies cover only certain drugs or provide partial payment for unapproved drugs
Many policies have a co-pay, where the policyholder pays a set amount for a doctor visit or emergency room visit
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Provider Networks Two most common
networks Health
Maintenance Organizations (HMO’s)
Preferred Provider Organizations (PPO’s)
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Both HMO’s and PPO’s provide a list of providers. HMO’s usually provide a more limited list.
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Comparison of Insurance Plans
Type of Health Plan Premium Selection of Physician
Indemnity Plan High Flexibility to select a physician or specialist
Managed CareHMO
Relatively low Primary care physician refers the patient to specialist
Managed CarePPO
Low, but usually higher than HMO
Greater number of physicians to choose from with PPO’s than HMO’s
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When You Leave a Job
Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue health insurance coverage for up to 18 months after your employment ends.
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Disability Insurance
The ability to earn a living is one of your most valuable assets. Disability insurance covers your wages if you are in an accident or too ill to work for an extended period of time.
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Life Insurance
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Life Insurance Life insurance provides payment to a
specific person when the policyholder dies. This person is known as the beneficiary. Whole life insurance can build up savings
for the policyholder over time and the policyholder may borrow from the “cash value” of the policy
Term insurance provides insurance over a specified period of time.
Universal life insurance is a combination of term and whole life, giving the policy more flexibility.
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Term Life Insurance
Provides protection only for a specific period of time
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Whole Life Insurance
Provides basic lifetime protection so long as premiums are paid
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Questions?
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References and ResourcesImages:
Microsoft Clip Art: Used with permission from Microsoft.
Textbooks:
Ross Lowe, 2006. Consumer education & economics, student edition. 6 Edition. Glencoe/McGraw-Hill
Madura, Jeff, Mike Casey, and Sherry J. Roberts. Personal financial literacy. Boston: Pearson, 2010. 23-29. Print.
Websites:
All Insurance Information Organization. Great site for general insurance information.
http://allinsuranceinfo.org/
Federal Trade Commission
Filing for Bankruptcy: What you should know.
http://www.consumer.ftc.gov/articles/0224-filing-bankruptcy-what-know
Insurance 411 Organization
Web tool to make a credit card size insurance information card to carry in your wallet.
http://insurance-411.org/
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References and ResourcesMoney MattersFinancial Education Curriculum produced by First Command Educational Foundation, 2010.http://www.fcef.com
NEFE High School Financial Planning Program National Endowment for Financial Education.http://www.hsfpp.org/
Privacy Rights Clearing HouseInformation on record Keeping.https://www.privacyrights.org/fs12a-personal-data-retention-and-destruction-plan#whykeep
Record Keeping and Personal Care GuideCreate personal records for the family.http://ddc.ohio.gov/Pub/RecordGuide.pdf
Texas Department of InsuranceConsumer information guide for purchasing insurance.http://www.tdi.texas.gov/pubs/consumer/cb088.html
Texas Financial Responsibility ReportInformation on Texas law concerning auto insurance.http://www.tdi.texas.gov/pubs/consumer/cb088.html
United States CourtsInformation on Bankruptcy.http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics.aspx
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