INSURANCE,
DEBTS, and
SAVINGS
Health insurance
Helps you pay for the costs associated with both
routine and major medical care so that your financial
accomplishments and plans are not seriously damaged
or even destroyed.
• Health insurance coverage is available from two main sources:
• private and
• government-sponsored programs.
• Private health insurance pays for approximately 35% of all medical
care expenditures in the United States, while government programs
fund about 45%.
• Most of the remaining amount spent on medical care is paid for outof pocket by patients themselves.
Group Health
Insurance
Health insurance consisting of
contracts written between a group,
(employer, union, etc.) and
the health care provider.
GROUP HEALTH INSURANCE
Typically, group plans provide comprehensive
medical expense coverage and may also offer
prescription drug, dental, and vision care service.
GROUP HEALTH INSURANCE
The coverage provided by any given plan
is subject to negotiation between the
group and the insurer, and the group may
offer several options for health insurance
coverage.
If you work for an employer that has more than just a few
employees, you’ll probably have access to some type of
group health plan. With the high cost of health insurance,
most employers now require employees to pay part of the
cost.
Trade associations and professional groups may also offer group insurance to
their members at attractive rates.
Some groups choose to self-insure, which means that the employer or other
group takes responsibility for full or partial payment of claims.
People who don’t work for an employer who provides health insurance—as well
as those who require additional personal or family health insurance—can
purchase health coverage on an individual basis directly from providers.
HMO or HEALTH MAINTENANCE ORGANIZATION
Is a health maintenance organization is a medical insurance group that
provides health services for a fixed annual fee.
SHORT-TERM HEALTCARE
Also known as the “traditional HMO.”
Has no life insurance coverage.
There may be a yearly increase upon
renewal.
HMOs cover only up to age 60.
There is no return of premiums for nonutilization.
HMO or HEALTH MAINTENANCE ORGANIZATION
1.
2.
3.
4.
5.
6.
7.
8.
Asalus Corporation (Intellicare) Asalus is formerly Intellicare
Asiancare Health Systems
Avega Managed Care
CareHealth Plus Systems
Carewell Health Systems
Caritas Health Shield
Maxicare Healthcare Corporation
MediCard Philippines
SENIOR CARE
This type of healthcare works similarly to the shortterm coverage except that it covers ages beyond 60.
It’s an individual type of HMO and it’s the most
expensive program.
Renewal is not guaranteed.
LONG-TERM HEALTHCARE
This is an HMO with a Health Savings Account.
It has a fixed premium program, usually 7 years
which matures in 20 years.
Sample Benefits of
LONG-TERM HEALTHCARE
Long-term Care Benefits
Yearly Health Benefits
Long-term Care Bonus
Term Life Insurance Coverage
Accidental & Dismemberment
Waiver of Installment Due to Death/ Credit Life
Waiver of Installment & Premium Due to Total and
Permanent Disability
What is an Insurance?
coverage by contract whereby one party
undertakes to indemnify or guarantee
another against loss by a specified
contingency or peril (webster)
an agreement in which you pay a
company money and they pay your costs
if you have an accident, injury, etc.:
Understanding the Purpose of
Insurance
• Insurance is for protection
should anything happen to
you.
• It ensures your family’s
ability to continue on
without being financially
devastated.
This Photo by Unknown Author is licensed under CC BY-NC-ND
Who needs Life Insurance
• Breadwinners
• Stay-at-home parents
• Stay-at-home parents should have protection to replace their
valuable services to the family.
• Singles
• They have loved ones to take care of, such as their parents or their
siblings.
• They may have plans to start a family soon and want to buy when
the cost is lower or while they are still healthy and insurable.
• They are in business partnership and want to protect the business
LIFE INSURANCE
Life insurance helps replace lost income if premature death occurs,
providing funds so that your loved ones can keep their home,
maintain an acceptable lifestyle, pay for education, and meet
other special needs.
Hospitalization and health insurance
Covers medical costs when you get sick or injured, and
disability insurance protects your income while you’re ill.
All of these types of insurance are intended to protect you and
your dependents from the financial consequences of losing
assets or income when an accident, illness,
or death occurs. By anticipating the potential risks to which
your assets and income could be exposed and by weaving
insurance protection into your financial plan, you lend a degree
of certainty to your financial future.
What is the PURPOSE of an INSURANCE?
All of these types of insurance are intended to protect you and
your dependents from the financial consequences of losing
assets or income when an accident, illness, or death occurs.
By anticipating the potential risks to which your assets and
income could be exposed and by weaving insurance protection
into your financial plan, you lend a degree of certainty to your
financial future.
INSURANCE POLICY
• An insurance policy is a contract
between you (the insured) and an
insurance company (the insurer) under
which the insurance company agrees
to reimburse you for any losses you
suffer according to specified terms.
• From your perspective, you are
transferring your risk of loss to the
insurance company. You pay a
relatively small certain amount (the
insurance premium) in exchange for a
promise from the insurance company
that they’ll reimburse you if you suffer
a loss covered by the insurance policy.
This Photo by Unknown Author is licensed under CC BY-ND
Managing Debts Effectively
o Debt is an amount of money borrowed by one party from
another. Debt is used by many corporations and individuals as
a method of making large purchases that they could not afford
under normal circumstances.
o A debt arrangement gives the borrowing party permission to
borrow money under the condition that it is to be paid back at
a later date, usually with interest.
BUY NOW PAY LATER
J. Reuben Clark said:
Once in debt, interest is your companion every minute of the day and
night, you cannot shun it or slip away from it; you cannot dismiss it; it
yields neither to entreaties, demands or orders; and whenever you get in
its way or cross its course or fail to meet its demands, it crushes you.
Good Debt vs. Bad Debt
o Do you have debts?
o Is debt good or bad?
o Should you get into debts?
Good Debt vs. Bad Debt
o The good news is NOT all debts are bad.
o There’s what we call Good Debt and there’s Bad Debt.
BAD DEBTS
Are credit card debts or loans that have no potential return on
your money.
Example:
borrowed money to finance a vacation or to buy a high end
gadget for your personal use
Good Debt vs. Bad Debt
GOOD DEBTS
Are those that have a potential return on your money.
Examples:
Debts to finance a business or your child’s education
Why should we manage our debt?
Debt can turn into a disease.
It could control your life, diminish
your happiness, and limit your
freedom.
Why should we manage our debt?
Getting out of debt may be one of the
hardest things to do.
It takes a lot of effort and time.
But you must persevere.
You can never be truly free until you are
debt free.
Types of Debt
Credit Card Cash Loans
A loan that allows the cardholder to avail
of a portion of his or her total credit limit
in cash.
Types of Debt
Credit Card
Card issued by a bank, business, etc.
allowing the holder to purchase goods or
services on credit.
Types of Debt
Car Loan
A loan used for purchasing a new or a
used car vehicle.
Types of Debt
Home Loan
A loan advanced to a person to assist in
busying a house or condominium.
This
Photo
by
Unknow
n
Author
is
licensed
under
CC BYSA-NC
Types of Debt
Business Loan
A loan specifically intended for business
purposes.
Tips on how to manage your debt
1. As much as possible,
pay off your credit card
debts in full and on time so
that you don’t have to incur
charges.
2. Don’t get into More Debt
Live below your means.
Don’t spend more than you
make.
Tips on how to manage your debt
3. Use cash or debit cards.
If you have 5 credit cards, cut up the three
cards and retain only one or two cards
which you will use for convenience
purposes.
Tips on how to manage your debt
4. Spend on necessities, not
luxuries.
Buy only what is necessary like
food, insurance, and utilities.
Change your habit of spending to
the habit of saving.
Tips on how to manage your debt
5. Make a list of all your debts and pay them off one at a time.
6. Increase cash flow to fast track debt payment.
7. Consider liquidating your savings and non-income producing
assets.
8. Change your money mindset. (Debt is not a solution but an
obstruction.)
9. Prepay your mortgage.
Prepay your Mortgage
So, when you get bonuses, instead of spending it
on luxury or unnecessary things, use the extra
cast to prepay your mortgage.
You’ll get out of debt sooner and live a worry.
Prepay your Mortgage
For example:
If you have a 30-year mortgage at 4.5% for
P300,000, your monthly payment is P1,520.06. If
you put an additional P500 into these payments,
you can pay off your mortgage in 18 years and 2
months! WOW!
You would eliminate 12 years of debt!
What are savings?
Savings is the money a person has left over
when they subtract their consumer
spending from their disposable income
over a given time period. Savings can be
used to increase income through investing.
Building an Emergency Fund
Unexpected things happen, no matter how
much you plan in life.
To prepare for life’s little “disasters,” set up
an emergency fund to help pay the
unforeseen expenses.
You think you don’t need
an Emergency fund?
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•
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Major car repairs
Major home repairs
Major appliance repairs or replacement
Loss of job
Serious illness or hospitalization
Extended care for elderly loved ones or longterm care
Saving the Right Way
Saving the WRONG WAY:
Income – Expenses = SAVINGS
Saving the RIGHT WAY
Income – SAVINGS = Expenses
Before you spend, you need to save first.
Better Formula for SAVINGS
INCOME – TITHES – SAVINGS = EXPENSES
Pay Yourself First
Set aside 20% of your income to save for your
future.
If possible, save 20% or more.
Treat it like a bill that you must pay, and pay it first.
Small Savings, Big Money
Spending is a habit and so is saving.
What if you could make small changes in your
spending habits?
Start saving P 10.00 a day – that P 300.00 a month.
Your Php 300.00 per month savings can become
P 447,107 in 30 years at 8 % annually.
Save P 20.00 a day or P 600.00 a month and you will
have P 894,214 in 30 years at 8% interest annually.
Small Savings, Big Money
You may cut down on things like soda, coffee,
bottled water, cigarettes, cable TV, high-end
gadgets and phones, shopping, fancy cars, eating
out, partying, etc.
Remember, it’s not how much you earn that counts,
It’s how much you SAVE.
One of the common traits among rich people is that
they are very conscientious when it comes to
spending.
Source: The Secret to Saving and Building Your Future, p.63
Make a short skit
Task
Overall presentation
(Creativity/Humor)
(50)
The skit is very fun to
watch and the
audience engange
Focus/Purpose
(25)
Fully addresses the
purpose and the topic
Voice
(15)
The voice was loud
and clear
Did the students
used props,
costumes, etc.
Effort
(10)
Topic-What is the Importance
of the following:
• Health Insurance
• Insurance for
Singles/Breadwinners
• Insurance for Parents
• Savings
• Managing Debts
This Photo by Unknown Author is licensed under CC BY