INSURANCE 2
MORE ABOUT INSURANCE
Personal Finance
WHAT DO WE
NEED INSURANCE
FOR?
WHAT TYPE OF INSURANCE
SHOULD I PURCHASE FIRST?
• Health insurance (along with
disability and auto/property)
should be the first insurance
you purchase.
INSURANCE
Generally,
the higher
the
deductible,
the lower the
premium.
WHAT IS A PREMIUM?
The premium is the cost of the
policy and is paid monthly/every
six months/yearly if purchased on
your own. The premium cost is
deducted from your paycheck if the
employer provides the insurance.
WHAT IS A DEDUCTIBLE?
The deductible is the
amount the policy
holder pays when a
claim is “settled”. It is
the amount that has to
be paid out of pocket
before the insurance
pays their part.
LIFE
INSURANCE
TERM LIFE INSURANCE
How it Works
• Term insurance is the most straightforward
form of protection. You generally pay
premiums on a monthly or annual basis and
your family is protected for that "term".
• This is the only type of life insurance which
does NOT have a cash value.
• This type of insurance only pays a death
benefit.
TERM LIFE INSURANCE
Typical Uses:
• Help provide for a family's loss of income
• Cover short- term debts and needs
• Provide additional insurance protection
during the child raising years
• Provide longer term protection to help
your family pay off a mortgage, or to help
pay for a college education
WHOLE LIFE INSURANCE
How it Works
• Whole Life Insurance offers level premiums and life
insurance protection for as long as you live, provided
that premiums are paid as required to keep the
policy in force.
• Whole Life policies also provide for the accumulation
of cash value on a tax-deferred basis which can be
used when you need it, to help with life’s
opportunities.
• Policy loans do accrue interest, and any outstanding
policy loans and interest will reduce the death
benefit and cash value.
WHOLE LIFE INSURANCE
TYPICAL USES:
• Provides for a family’s loss of income,
mortgage costs, and educational needs
• Access to cash value for life’s
opportunities
• Leaving a legacy for the next generation
WHOLE LIFE INSURANCE
CASH VALUE
• If the insurance has a cash value,
the policy can be surrendered for a
calculated amount of money which
includes the premiums paid as well
as the interest on that money.
• The cash value is a dollar amount
that increases over the years. If the
policyholder dies, the beneficiary
receives the death benefit, but not
the cash value.
WHOLE LIFE INSURANCE
DEATH BENEFIT
(FACE VALUE)
The amount of coverage of a life
insurance policy. This is the amount
the beneficiary will receive in the case
of the death of the policy owner.
http://www.slideshare.net/healthcomp
are/what-the-heck-are-managedhealth-care-plans
WHAT IS A MANAGED HEALTH
CARE PLAN?
A managed health care plan means you
usually must first meet with your
primary health care physician before
seeing a specialist. The primary health
care physician “manages” your health
care. A co-pay may be required when
seeing your primary care physician.
AUTO INSURANCE POLICIES
If you decide to change auto insurance
policies, make sure the new policy starts
at 12:01 AM following the termination of
the old policy (policies expire at
midnight). A lapse in policy may leave
you responsible if you have an accident.
UNINSURED OR NO FAULT
Uninsured or “no fault” auto
protection covers the cost of injuries
to the policyholder and family
members. Uninsured or “no fault”
motorist’s protection also covers car
repairs, financial losses due to
injuries, car damage caused by a hitand-run driver, or the cost of other
people’s injuries by a driver who has
insufficient coverage.
DISABILITY INSURANCE
Disability insurance protects
against the financial effects of not
being able to work.
WHAT IS LIABILITY INSURANCE?
Liability insurance covers you in
case someone is hurt on your
property or in your business.
WHAT IS A
FLOATER?
FLOATERS
• A personal property “floater” may
be needed if you have expensive
jewelry or other items.
• It covers the cost of replacement
should the item get stolen or
damaged.