Pf2 insurance

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Pf2 insurance

  1. 1. Personal Finance Insurance 101
  2. 2. Learning Goal... To be able to define terms relating to insurance.
  3. 3. What is Insurance?? Insurance – an arrangement between an individual and an insurance company to protect the individual from risk. We buy insurance to help limit the financial losses when accidents occur.
  4. 4. Insurance Vocabulary Policy – a contract between the individual and the insurer specifying the terms of the insurance arrangement. Premium – the fee paid to the insurer to guarantee coverage. Deductible – the amount paid out of pocket by the policy holder for the initial portion of a loss before the insurance coverage begins.
  5. 5. Example... You pay money to have car insurance (Premium) When you get into an accident that is your fault, you must pay a certain amount before the insurance company picks up the rest (Deductible) The higher the deductible, the lower the premium
  6. 6. Learning Goal... To be able to identify and explain the importance of the 5 necessary types of insurance.
  7. 7. Types of Insurance 1. Automobile 2. Health 3. Life 4. Disability 5. Homeowner’s / Renter’s
  8. 8. Automobile Insurance 4 Different types: 1. Liability (Required by law) Pays for bodily injury to other people, damage to property, court fees 1. Medical Payments Pays for hospital bills for you and anyone riding in your car
  9. 9. Automobile Insurance 4 Different types: 3. Uninsured Motorist Helps pay medical bills if hit by someone without insurance
  10. 10. Automobile Insurance 4 Different types: 4. Collision/Comprehensive Pays to repair your car if it was your fault or no other car was involved. Collision – deer, fence post, etc Comprehensive is for non-driving risks such as hail, theft, flood, vandalism, etc.
  11. 11. Health Insurance Covers medical costs if you are injured or become ill Each policy is different Most people receive health insurance from their employer Children are covered up to the age of 19; unless they are attending college full time (23)
  12. 12. Life Insurance Pays people who are dependent on someone else if that person dies Usually offered from an employer, but can (and should) purchase independently. Life insurance is usually very low in price compared to the coverage you receive When should you get life insurance??
  13. 13. Life Insurance 2Types of Life Insurance 1. Whole Life Coverage for life Includes a savings plan 1. Term Life Coverage for a specific period of time. MUCH cheaper than Whole Life  ALWAYS GO WITH TERM LIFE!!! 
  14. 14. Disability Insurance Will pay a percentage of your income from a job if you are sick or unable to work for long periods of time Usually will pay between 60% and 70% Also is a common insurance offered by an employer
  15. 15. Homeowner’s / Renter’s Protects your home and possessions within the home from damage Includes Fire, Storm, etc. Natural Disasters require a special insurance Theft Also covers liability if someone else is injured on your property and they sue
  16. 16. Learning Goal... To be able to identify and explain the importance of the 5 necessary types of insurance.

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