Unit Eight: Families Manage

2. Unit Eight: Families Manage Chapter 24: Family Protection and Security

3. Focus Topic: Buying Insurance

4. Why buy insurance? • Insurance is a form of protection against financial loss. • You pay a premium to a company that agrees to handle the type of loss described in the policy.

5. Liability Risks • Liability is the legal responsibility for another person’s financial costs due to a loss or injury. • You could be liable if someone’s injury is • due to your neglect. • caused by your property.

6. This insurance covers the cost of repairing your vehicle following an accident with another vehicle. You can only insure your vehicle for its value. Payments on damages can be received only up to the value of the car. Collision Auto Insurance

7. Comprehensive Auto Insurance • This covers the costs of damage from falling objects such as hail, rocks, or tree branches. • Your policy will state the loss for which you are insured.

8. Liability Auto Insurance • This covers the cost of any damages your car may cause to another person’s property or physical injury to his or her body. • Most policies have three numbers indicating liability coverage. For example, 100/300/50 means • $100,000 coverage per person • $300,000 coverage per accident • $50,000 property damage

9. This protects against the cost of losing your home to fire, hail, smoke, lightning, windstorm, theft, vandalism, riots, explosions, aircraft, and vehicles. It includes coverage for personal property in your home. Homeowner’s Insurance–Basic Property Coverage

10. Homeowner’s Liability Insurance • This insurance protects you against loss if someone is hurt on or by your property, as in the case of a • dog bite. • tossed baseball breaking a window.

11. Renter’s Insurance • Renters carry insurance on their possessions to guard against the • loss of personal belongings. • risk of a visitor being harmed on or by their property.

12. Health Insurance • Basic medical insurance covers the cost of hospital expenses, X-rays, lab tests, and many doctors’ services. • Major medical insurance usually covers all or most of the remaining expenses.

13. Health Maintenance Organizations (HMOs) pay health care providers a monthly amount in exchange for services when needed. Preferred Provider Organizations (PPOs) are organizations of doctors and/or hospitals contracted to provide health care services to members for certain fees. Group Health Insurance

14. Disability Insurance • This protects against loss of income if a person is disabled. • The amount of income paid by the policy varies. • The waiting period varies before benefits begin.

15. Term Insurance • This policy insures your life for a set number of years. • The face amount is the payout at the policyholder’s death. • The money is paid to a beneficiary, the person named on the policy to receive it.

16. Cash Value Insurance • This life insurance provides coverage for a death benefit and acts as a savings plan with a cash value. • You receive the cash value when you drop the policy. • Your beneficiary receives the death benefit when you die.

17. Whole Life Insurance • This is a type of cash value insurance. • The premium stays the same as long as you carry the policy. • The cost of protection is spread evenly over the years.

18. Universal Life Insurance • This is a combination plan that includes both term and cash value policies. • Premiums stay the same each month. • Part of the premium provides the death benefit protection and part goes into savings.

19. Factors to Consider When Buying Insurance • Extent of financial loss that could result • Amount of loss the family can pay on its own • Responsibilities of family members • Total family savings and investments

20. Focus Question What should a family consider before buying insurance?