Unit B
Personal Law
Essential Standard 4.00
Understand financial, credit, and insurance law
BB30 Business Law 4.02
Summer 2013
4.02 Understand Types and Aspects of Insurance
A. Insurance Defined
Premiums
1. What are premiums?
2. What type of insurance types have them?
Insurable Interest-Financial Responsibility
1. What determines whether there is an insurable interest?
Risk- What is risk and how does it affect
BB30 Business Law 4.02
Summer 2013
Insurance Defined-Continued
Exclusions
1. What does exclusion mean?
2. How does exclusion apply to insurance?
3. Why do insurance companies put exclusions in their policies?
Claims
1. What is a claim in regards to insurance?
2. How does a policy holder enter a claim?
BB30 Business Law 4.02
Summer 2013
Insurance Defined (Continued)
Deductibles
1. What are deductibles?
2. What is the purpose of a deductible for the policy holder?
Insured
1. What or who is the insured
2. Is the insured always the policy holder or not?
Insurer
1. Who is an insurer?
2. Is the insurer a business/corporation or an individual?
BB30 Business Law 4.02
Summer 2013
Automobile Insurance
(http://www.ncdoi.com/_Publications/Consumer%20Guide%20to%20Automobile%20Insurance_CAU1.pdf)
a. Personal Auto Policy (PAP)
a. Why have a PAP?
b. What does it protect you from?
b. Liability Coveragea. What are the two types?
b. What does it protect you from?
c. Property Damage Coverage
a. What does it protect you from?
b. What is an example of this type of coverage?
d. Collision Coverage
a. What does it protect you from?
b. What is an example of this type of coverage?
e. Comprehensive Coverage-Other than Collision
a. What does it protect you from?
b. What is an example of this type of coverage?
c. How is this different
collision?
BB30from
Business
Law 4.02
Summer 2013
Automobile Coverage (Continued)
f. Medical Payment Coverage(Med Pay)
1. What is medical Payment Coverage?
2. Whom does this coverage pay for in the case of a covered accident?
g. Uninsured Motorist Coverage
1. What is uninsured motorist coverage?
2. What are two types of losses that this type of coverage will cover?
g. Underinsured Motorist Coverage
1. What is underinsured motorist coverage?
2. Is this coverage mandatory in North Carolina?
g. Miscellaneous Coverage-Towing, Rental Vehicle, Custom Coverage
1. Are these types of coverage mandatory for automobile insurance?
2. What does towing coverage provide?
3. What does rental coverage provide?
4. What does custom insurance provide?
BB30 Business Law 4.02
Summer 2013
Motorcycle Insurance
Liability, Collision, Uninsured/Underinsured and Towing Coverage is identical
to a regular automobile policy. It is important to have a special coverage for a
customized motorcycle. Traditional motorcycle coverage will only cover the
“stock value” not any customizations are added equipment.
BB30 Business Law 4.02
Summer 2013
Boat Insurance
Pleasure boat policies or endorsements often state that coverage includes
"the boat and all permanently attached equipment". The policy may then
list items that are not permanently attached, but are covered as either part
of the boat's value, or as a separate limit of insurance. Items that may or
may not be considered "permanently attached" under a policy include:
• Anchors
• Batteries
• Bilge pumps
• Boat furniture
• Boat and motor covers
• Cook stoves
• Deck chairs
• Depth finders
• Detachable canopies
• Emergency signaling devices
• Fire extinguishers
• Fittings
• Fuel tanks
• Horns
• Life preservers
• Lights
BB30 Business Law 4.02
Summer 2013
Property Insurance
a. Homeowners Insurance
1. What is homeowners insurance?
2. Why is it necessary?
b. Coverage for Property
1. There are (4) basic coverage types within a homeowners policy.
2. Coverage A is for dwelling. What constitutes a dwelling?
3. Coverage B is for other structures. What are other structures?
4. Coverage C is Personal Property. What items might you find listed?
5. Coverage D is for loss of use. What is loss of use and what if anything
does this coverage pay for?
BB30 Business Law 4.02
Summer 2013
Homeowner’s Exclusions
a. Earth Movement
1. What is earth movement?
b. Water Damage
1. What is water damage?
2. Why do most homeowners policies not provide water damage coverage
from flooding?
c. Power Failure
1. What constitutes power failure?
2. Why don’t insurance policies provide coverage for this?
d. Neglect
1. What does neglect mean in regards to being a policy exclusion?
2. Why is it an exclsusion?
BB30 Business Law 4.02
Summer 2013
Additional Types of Property Coverage
e. Renters Insurance
1. What is renters insurance?
2. Whom should purchase renters insurance?
3. Do roommates living in the same house, apartment, condo etc.,
need to each have their own renters insurance?
f. Fire Insurance
1. What hazards does fire insurance provide property coverage for?
.
BB30 Business Law 4.02
Summer 2013
Health Insurance
Traditional Health Insurance (Major Medical Coverage)
1. What type of coverage does Major Medical Coverage offer?
2. What is the main reason for those who elect this type of coverage?
3. What is a characteristic of major medical coverage?
Annual Deductible
1. What is an annual deductible?
2. How does this work?
Major Exclusions for Coverage
1. For heath care policies, what do major exclusions include?
2. Why do health care insurance providers have these exclusions?
Possible lengthy waiting periods
1. What is a “waiting period” in a health insurance policy?
Group Insurance Coverage
1. What is group health insurance coverage?
2. Why is group health insurance usually better for an employee?
BB30 Business Law 4.02
Summer 2013
Managed Health Care
1) HMO
1. What does HMO stand for?
2. Do HMO’s allow you to pick your primary care physician?
3. How is the majority of your health care provided when you have an
HMO as your health insurance?
2) PPO
1. What is a PPO health insurance company?
2. What are the requirements for their policy holders?
3. Can you go to any doctor that you desire?
3)HMO-(POS)
1. What is HMO (POS) type health care insurance?
2. What are the benefits (if any) of this type of policy?
Individual Insurance Coverage
1. What is individual insurance coverage?
2. What is the primary negative to this type of health insurance?
3. Do people that have health insurance primarily have individual or
group health insurance?
BB30 Business Law 4.02
Summer 2013
Supplemental Health Insurance Coverage
a. Cancer Insurance Coverage
1. What is cancer insurance?
2. What is the purpose of cancer insurance?
3. Does cancer insurance cover other illnesses?
b.
1.
2.
3.
4.
Dental Insurance Coverage
Is dental insurance a group or individual policy?
Does dental insurance have restrictions on most policies?
Why are there restrictions?
What type of coverage do dental insurance policies generally
provide
c. Long Term Medical Coverage
1. What does long term medical coverage provide?
2. Why might this be a good insurance policy to purchase if you are
in poor health?
BB30 Business Law 4.02
Summer 2013
Health Insurance (Continued)
e. Vision Insurance Coverage
1. What type of coverage and items does vision insurance normally
provide?
2. Can you select your own optometrists/ophthalmologist?
Government Insurance Coverage
Medicare
1. What is Medicare?
2. Who provides Medicare?
3. Who is eligible for coverage?
4. What is a special consideration for coverage under age?
Medicaid
1. What is Medicaid?
2. Who provides Medicaid coverage?
3. Who is eligible for coverage?
4. Do state governments or the Federal government determine
eligibility?
BB30 Business Law 4.02
Summer 2013
Medigap Insurance
1. What is Medigap Insurance?
2. Who needs this type coverage?
3. Does the government (state or Federal) provide this coverage?
Disability Insurance Coverage
1. What is disability insurance?
2. Who pays for or provides this type insurance to an employee?
BB30 Business Law 4.02
Summer 2013
Life Insurance-Types (How Much Do You Need?)
Term Insurance
Term Life Insurance
1. What is term insurance?
2. What is the primary benefit of term life insurance?
Increasing Term Insurance
1. What is increasing term insurance?
2. What is the benefit of this type of policy initially but not a benefit as the
insured gets older?
Decreasing Term Insurance
1. What is decreasing term insurance?
2. How does this policy work for the insured?
2. Why would a person purchase a decreasing term policy?
BB30 Business Law 4.02
Summer 2013
Life Insurance (continued)
Level Term Insurance
1. What is level term insurance?
2. What are the advantages and disadvantages of this type of
insurance.
Permanent Life Insurance
Whole Life Insurance
1. What is whole life insurance?
2. What type of insurance coverage does it provide?
3. Is there an advantage to this type of policy?
Universal Life Insurance
1. What is universal life insurance?
2. How does universal life compare to whole life insurance?
3. What is one advantage to universal life insurance.
Variable Life Insurance
1. What is variable life insurance?
2. What is the primary difference with type of policy?
BB30 Business Law 4.02
Summer 2013
Life Insurance (Continued)
Life Insurance Optional Rider Coverage
Dependent Children
1. What is a rider?
2. What type of coverage does a rider provide for children?
Spouse Rider
1. What type of coverage does a rider provide for a spouse?
Guaranteed Insurability
1. What is guaranteed insurability?
2. What are the advantages of guaranteed insurability?
Accidental Death and Dismemberment
1. What does accidental death mean to you?
2. What does accidental dismemberment mean to you?
3. How is this coverage different than a traditional life insurance policy?
BB30 Business Law 4.02
Summer 2013
Life Insurance (Continued)
Beneficiaries
1. What is a beneficiary in a life insurance policy?
2. What happen if the beneficiary dies before or at the same time as the
insured?
Contingent Beneficiary
1. What is a contingent beneficiary?
2. If there are (3) contingent beneficiaries, how are the proceeds from an
insured’s policy distributed if the primary beneficiary is deceased?
Collecting Death Benefits
1. How does a beneficiary collect any death benefits?
2. What document must a beneficiary have in order to claim any death
benefits for any insurance or other death benefits?
BB30 Business Law 4.02
Summer 2013
Life Insurance (Continued)
Cost factors
Needs Approach and the Human Life Value Approach
Needs Approach
1.What is one thing that must be determined in the needs approach?
Human Life Value
1. What is the one thing that must be determined in the human value
approach?
Statistical Basis for Life Insurance
Mortality tables
1. How does the mortality table work in order for insurance to calculate
rates?
Morbidity tables
1. How does the morbidity table work in order for insurance companies
to calculate rates?
What are the main differences between the two tables?
BB30 Business Law 4.02
Summer 2013
Insurance Fraud
1. What is insurance fraud?
2. What are some of the most common types of fraud that are reported in
North Carolina?
Automobile Repair
1. What are some of the common methods that automobile fraud
occurs?
2. Whom should customers who believe fraud may have been
committed against them for an auto repair, report it to?
Billing of Medical Services
1. What type billing incidents may be fraud?
2. Whom should a person who believes fraud may have been
committed for services they did not receive, report the incident to?
Automobile Accidents
1. What types of incidents or suspects accidents may constitute
fraud?
2. What should you do if you suspect you are a victim of this type
of fraud?
BB30 Business Law 4.02
Summer 2013
Insurance Fraud (continued)
Property Claims Adjusting
1. What is this type of fraud?
2. Why has this type of fraud been so common in North
Carolina in the past several years?
Adjusting
1. What is “adjusting” in the insurance property insurance
industry?
2. How does adjusting work, when the adjuster is doing a
professional job and not trying to defraud a consumer?
3. What are some of the most common methods that fraudulent
adjusters may utilize to defraud a consumer
4. Whom would you contact if you believed you were a victim of
adjusting fraud.
BB30 Business Law 4.02
Summer 2013