INSURANCE

1. INSURANCE Business & Personal Finance

2. Insurance The protection against possible financial loss. • Policy – A contact for insurance between the policyholder and the insurance company • Policyholder – the purchaser of the policy • Premium – a fee paid by the policyholder to the insurer for insurance • Coverage – protection provided by the terms of an insurance company • Insured – the people protected by the policy

3. Types of Risks • Risk – the chance of loss or injury • Peril – anything that may possibly cause loss. • Hazard – anything that increases the likelihood of loss through some peril • Negligence – failure to take ordinary or reasonable care to prevent accidents from happening.

4. Homeowner’s Insurance

5. A homeowner’s policy includes all of the following: • The building in which you live and any other structures on the property. • Additional living expenses • Personal Property • Personal liability and related coverage's • Specialized coverage's

6. Added Coverage • Personal Property Floater – additional property insurance that covers the damage or loss of a specific item of high value. • Umbrella Policy – (also called: personal catastrophe policy) supplements your basic personal injury claims. • Medical Payments Coverage – pays the costs of minor accidental injuries to visitors on your property.

7. Factors That Affect Home Insurance Costs Location of Home Type of Structure Coverage Amount and Policy Type Home Insurance Discounts Company Differences

8. Motor Vehicle Insurance

9. Financial Responsibility Law Every state in the United states has it! The law requires drivers to prove that they can pay for damages or injury caused by an automobile accident.

10. Two Categories of Motor Vehicle Insurance Protection for Bodily Injury and Protection for Property Damage

11. Bodily Injury Coverage Bodily Injury Liability Medical Payments Coverage Uninsured Motorist’s Protection

12. Bodily Injury Liability Insurance that covers physical injuries caused by a vehicle accident for which you were responsible.

13. Medical Payments Coverage Insurance that applies to the medical expenses of anyone who is injured in your vehicle, including you. It also pays if you or your family members are injured while riding in another person’s vehicle or if any of you are hit by a vehicle.

14. Uninsured Motorist’s Protection Insurance that covers you and your family members of you are involved in an accident with an uninsured or hit-and – run driver.

15. Motor Vehicle Property Damage Coverage Property Damage Liability Collision Comprehensive Physical Damage

16. Property Damage Liability Motor vehicle insurance that applies when you damage the property of others. It protects you when you are driving another person’s vehicle with the owner’s permission.

17. Collision Covers damage to your vehicle when it is involved in an accident. It allows you to collect money no matter who is at fault.

18. Comprehensive Physical Damage Protects you if your vehicle is damaged in a nonaccident situation, such as: Fire Theft Falling objects Vandalism Hail Floods Tornadoes Earthquakes Avalanches

19. Health Insurance

20. Type of Health Insurance Coverage • Basic Health Insurance Coverage • Hospital Expense • Surgical Expense • Physician Expense • Major Medical Expense Insurance • Long hospital stays • Multiple Surgeries • Hospital Indemnity Policies • Supplement to Basic Coverage and Major Medical

21. Dental Expense Insurance • Vision Care Insurance • Dread Disease Policies • Trip accident, death insurance, cancer policies • Illegal in many states • If you have major medical you are already covered • Long-Term Care Insurance

22. Private Health Care Plans • Private Insurance Companies • Hospital and Medical Service Plans • Health Maintenance Organizations (HMO) • Preferred Provider Organizations (PPO) • Home Health Care Agencies • Employer Self-Funded Health Plans

23. Hospital and Medical Service Plans Blue Cross Provides hospital care benefits Blue Shield Provides benefits for surgical and medical services performed by physicians

24. Health Maintenance Organizations Managed Care Prepaid health plans that provide comprehensive health care to their members. It is designed to control the cost of health care services by controlling how they are used. Health Maintenance Organization (HMO) A plan that directly employs or contracts with selected physicians and other medical professional to provide health care services in exchange for a fixed, prepaid monthly premium. Based on the idea that preventative services will minimize future medical problems.

25. Preferred Provider Organizations A group of doctors and hospitals that agree to provide specific medical services to members at prearranged fees. Point-of-Service Plan (POS) Combines features of both HMOs and PPOs

26. Government Health Care Programs Medicare Federally funded health insurance program available mainly to people over 65 and to people with certain disabilities. Medicaid A medical assistance program offered to certain low-income individuals and families .

27. DisabilityIncome Provides regular cash income when you are unable to work because of pregnancy, a nonwork-related accident, or an illness

28. Life Insurance Protect against financial losses caused by death Types of Life Insurance Policies Term Insurance Provides protection against loss of life for only a specified term, or period of time. It pays the benefit only if you die during the period that it covers Whole Life Insurance A permanent policy for which you pay a specified premium each year for the rest of your life

29. Additional Insurance Vocabulary • Deductible – the set amount that the policy holder must pay per loss on an insurance policy. • Claim – request for payment to cover financial losses. • Liability – legal responsibility for the financial cost of another person’s losses or injuries. • Copayment – a flat fee that you pay every time you receive a covered medical service • Beneficiary – the person named to receive the benefits from a life insurance policy