Insurance Mr Blankenship Home by jolinmilioncherie

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									1.    Why is insurance important to Have?
2.    What factors Impact the cost of insurance?
(Risk, peril, Risk management, insurance, premium, deductible, policy , claim,
loss, beneficiary, coverage, Types of insurance (auto,
Home, life, health, renters) liability, comprehensive, collision, uninsured, law of
large numbers)
 Overview of Insurance
Risk: The probability that injury, damage, or loss will occur.


Peril: Event which can cause financial loss
(fire, falling trees, lightning and others)


Risk Management:
1. Avoid Risk: Avoid situations that involve risk
2. Reduce Risk: Lessen frequency or severity of losses

    Wear seat belts, don’t drive fast

3. Assume/Accept Risk: Pay for losses personally

    requires large savings

4. Transfer/Share Risk: Purchase insurance for possible losses
              Insurance Basics

Insurance: A way to guarantee your financial
  protection against various risks

Insurance Policy: Contract detailing premium, deductible, and
  coverage limits in the event of a loss.

Policy Holder: A consumer who purchases the policy

Beneficiary: A person eligible to receive benefits under an
  insurance policy
Key Terms

 Loss: an accident or illness which causes a financial setback.
   - Must provide proof of loss

                 When making a claim you must prove loss.
    - Photograph or videotape each room
    - Keep documentation in a place other than your home

 Claim: A notice of a loss to the insurance company
    - When you have a car accident, you file a claim to collect

 Coverage Limit: The max. amt an insurance company will
   cover
Premium: Fee paid to be covered under specified terms


Deductible: The portion of the loss you pay before insurance
            company pays remaining cost


Law of Large Numbers: Insurance companies protect themselves
             against financial loss by spreading the risk of costly
             claims among many customers over many years
       Types of Insurance

Property: Provides protection against most risks to property, such as fire,
          theft and some weather damage

Liability: Provides protection from claims arising from injuries or damage
           to other people or property.

Auto: protects against loss in event of an incident involving a vehicle they
       own. Covering property, liability, and medical.

Health: Form of protection that eases the financial burden people
        may experience as a result of illness or injury.
Types of Insurance

Life: provides a monetary benefit to a decedent's family or other designated
      beneficiary in lump sum or annuity (regular payments)

Disability: Provides regular income when an employee is unable to work due
           to pregnancy, a non-work-related accident or an illness.

Homeowner’s : combines property and liability insurance to protect home.
            (Typically covers: Burglary, fire, wind, smoke, water,
            vandalism)

Renter’s: protects insured from loss of the contents of the dwelling rather
          than the dwelling itself
  Teen crash rates drop 40% 6 months after getting license
  70% chance of an individual getting in an accident in first 3
  years of driving- (Insurance Education Foundation)




Automobile Insurance: Arrangement between
individual and insurer to protect against risk from auto
accidents
 Factors of Insurance Rates

• Age: (Younger =expensive)
• Gender: Males under 25
• Good student discount
                                  •   Vehicle Use/mileage
• Multiple car/drivers policies
                                  •   Place of Residence/cities
• Cost of repairs
                                  •   Marital status
                                  •   Type/Age of car (theft)
                                  •   Driving Record
                                  •   Long-time customers
                                  •   Credit Score
     Types of Auto Insurance
                (ALL MO DRIVERS MUST HAVE)


1. Liability Coverage: Pays for bodily injury to other people & damage to
     property when you are responsible (legal min.)

a.   Bodily injury: driver is held legally responsible for injuries suffered by another
a.   Property damage: driver is held responsible for damage done to other’s property


     Policy limits for liability are usually quoted with three figures such as
     25/50/10 (thousands)
     25 = $25,000--Per-person bodily injury limit
     50 = $50,000--Per-accident bodily injury limit
     10 = $10,000--Per-accident property damage liability limit
2. Medical Payment insurance
    Medical Payment Insurance covers injuries to the driver of
    the insured vehicle or any passenger regardless of fault


3. Uninsured/Underinsured motorist
    Uninsured or Underinsured Motorists Insurance covers
    injury or damage to the driver, passengers, *(or the
    vehicle) caused by a driver with insufficient insurance or
    hit-and-run



           *In many states including MO uninsured only cover
           medical related injuries, not property damage
4. Physical damage insurance (damages to vehicle)
      A. Collision: covers collision w/ object, car, or rollover
      (Drop Collision? Is deductible higher than car value?)


      B. Comprehensive: physical damage losses except collision
          •    Theft, vandalism, fire, ice, windstorm, or hail
          •    Glass breakage, contact with animal

      Optional Protection
      • Towing Coverage
      • Rental Reimbursement




                               If you do
   not pay your premium before the due
   date you have no insurance.
What do I do if I get into an
accident?

 1.   Make sure that everyone in your car is not hurt
 2.   Check the other car to see if they are OK
 3.   Call the police
 4.   Get the following information from the other driver: name,
      address, telephone number, license plate number, drivers license
      number, insurance information.
 5.   Give the same information to the other driver.
 6.   Get the name and phone number of any witnesses
 7.   Keep a disposable camera in your car and take accident pictures
 8.   Call your insurance agent as soon as possible
 What is Health Insurance?
         Health Insurance: The Basics
(Form of protection that eases the financial burden people
may experience as a result of illness or injury.)



             Things you should know about Health Insurance

   1. Insurance costs a lot, not having it costs more
   2. If your employer offers insurance, get it
   3. You’ll pay more for freedom
   4. Health insurance plans include premiums, deductibles, and co-pays
   5. Co-payment is the portion of a claim that must be paid out-of-pocket.
      (Usually $5,$10, or $15 for each visit.)
   6. 46 million Americans do not have health insurance
   7. Young healthy ppl. often feel they don’t need health insurance
   Health Insurance: The Basics
Health Insurance
 Law of Large Numbers: Health insurance companies protect
 themselves against financial loss by spreading the risk of costly claims
 among many customers over many years

 Pre-existing Conditions: The more likely that people need health
 insurance, the more likely they are to seek it. An insurer may refuse to cover
 treatment if the condition existed prior to enrolling in a health insurance
 plan

  Fee for service          vs.             Managed Care
  Pay deductible 1st                       Use Dr.’s in network to limit costs
  Then pay coinsurance (20%)               Pay co-pay per visit
  Pay for each service                     May/may not have deductible
  Use any Dr. you find                     Preventative care included
  File claims                              Don’t have to file claims
               Type of Health Insurance
                       (Government Provided)
• Medical assistance for eligible individuals/ families w/ low incomes & disabilities
• Nation’s largest health insurance program (39 million Americans)
• Largest group covered by Medicare is people over the age 65
                                   Medicare                     Medicaid
                              All ppl. 65 & older.       Income based, all ages
     Who is eligible          Younger based on                   eligible
                                   disability              Disabled, orphaned
                                  $50 / month           Many have $0, some pay
       Premium
                                                          spend down amt.
        Paid by              Federal Government            State Government
      Co-payment                       yes                     Not usually
                               MEDICARE TYPES
                                    PART A                       PART B
    What it covers         Covers % of hospital bills Non-hospital expenses

                           Free if you have paid into   Small premium, deductible,
     What it costs         Medicare for 10 years        & co-pay
            Type of Health Insurance
                         (Managed Care)



Managed Care (HMO & PPO): Provide health care services at a
lower cost through network. Members agree to certain restrictions
which help lower the cost
Health Maintenance Organization (HMO): Healthcare network
of doctors that provide comprehensive healthcare to a group for a flat
monthly rate


Preferred Provider Organization (PPO): Healthcare network of
doctors that provide comprehensive healthcare to a group
  • Combine features of HMOs and fee-for-service plans

COBRA: If an employee loses their job they are covered for a set period
           of time. (18 months)
                  Individual Plans
               Insurance: The Basics
   Health self-employed, or whose company does not
People who are
offer health insurance as a benefit, can buy health insurance
directly from an insurance company


Advantages:
• Personalized/customized policy
• Discounts for healthier people



                                   Disadvantages:
                                   • Can be denied coverage
                                   • W/ pre-existing conditions,
                                   it will be very expensive to cover
Life Insurance
Provides a monetary benefit to a decedent's family or other designated
beneficiary in lump sum or annuity (regular payments)




   Pay off mortgage or debts
   Accumulate savings
   Establish a regular income for
    survivors/children


    Term Life or Whole Life?
    Types of Life Insurance

   Term Life insurance
    – Provides protection against loss of life for only a specified
      term or period of time.
    – Could be for 1,5,10, or 20 years
    – If you stop paying your coverage stops.



 Renewable Term insurance
      Coverage ends, renewable w/ higher premiums
 Conversion Term
      Allows you to change from term to permanent coverage. w/
       higher premiums.
    Whole life insurance
Is a permanent policy for which you pay a specified
   premium each year for the rest of your life. The
   insurance company pays a set amount after you die.
   Limited Policy: pay for set number of years, the insurance
    stays until death

   Variable life: premiums are placed in stocks and are paid an
    amount depending on how market does.

   Universal life: part of premium is put into an account and you
    can borrow against it.
 Disability Insurance
Provides regular income when an employee is unable to work due
   to pregnancy, a non-work-related accident or an illness.


    Single greatest asset is potential earning power

    Pays income if policy holder gets sick and can’t work

    Limited to 2/3 gross income. Why?


Worker’s Compensation: If your disability is a result of an accident
or illness on the job.
  Homeowners Insurance: The Basics

   • Legal contract to protect the insured, their home, and belongings if
    they are damaged or destroyed (May also cover garages, sheds, & pools)
   • Protection is provided against losses caused by fire, water damage, storm,
     theft, and other perils


   Homeowner’s Insurance is comprised of property & liability insurance

                       Apartment

Mobile Home
                                                         House



                                                      Condominium
Homeowners Insurance: The Basics




Insurer can opt to purchase coverage on unique items
Certain natural disasters in areas prone to them are also excluded from
standard coverage
                  Renters Insurance
     Protects individuals who live in a house, mobile home,
     condominium, or apartment that is owned by another person

Protects against:
         Theft
         Loss of personal property




        If you’re headed to college…
    If you’re living in a dorm, check your parent’s policy. Most
     homeowner’s policies will cover items away from the home, up
     to a certain dollar amount.
This is what your policy covers:
     Personal Items       – your stuff at home is covered in case of fire or
     theft. Estimate and itemize the dollar value of the things you own, once
     a year. Put that information in a safe place away from your home, like
     at your parent’s house or in a safety deposit box in a bank.

     Unintentional damage: Fire from cooking
     Liability: Fall on ice
     Additional living expenses (hotel)


     * Check the limits on your policy.
                  Small Claims Can Hurt

– The severity of a claim does not matter to some insurance companies,
  simply the number of claims.

– Most insurance companies will look at your claims record for the
  previous 5 years.

– Many companies will not insure those who have had 2-3 claims in 3
  years, no matter the amount of these claims.
   Ways to Reduce your Premium

• Raise your deductible
• Buying homeowners and automobile insurance from the same
  company
• Fire resistant structures, sprinkler systems, or smoke detectors
• 55 years of age, or older and retired
• Original owner
• New home
• Non-smoker
• Security system

								
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