Auto, Homeowners,
Medical and Life
Insurance
Dollars and Sense
Copyright
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What is Insurance?
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Terms to Know

Appraisal

Estate

Asset

Face amount

Beneficiary

Group insurance

Cash value


Co-pay
Open-enrollment
period

Death benefit

Premium

Deductible

Supplemental
insurance
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Why is Insurance Needed?
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Auto Insurance
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Auto Insurance
Types of Insurance Available

Collision Coverage

Comprehensive Coverage

Liability Coverage

Medical Payments Coverage

Personal Injury Protection

Rental Reimbursement Coverage

Towing and Labor Coverage

Uninsured Motorist
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What Does Collision
Coverage Pay?

Pays the cost of repairing or replacing
your car after an accident regardless of
who was driving or who was at fault

Payment is limited to cash value of car
minus your deductible
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What does Comprehensive
Insurance Pay?
It pays damage to a car
caused by fire,
vandalism, hail or other
events besides
collision.
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What Does Liability Pay?

Texas law requires 30/60/25
 Liability protects you from
lawsuits and pays other
people’s expenses caused by
accidents.

Medical / funeral

Car repair or replacement

Rental car during repair

Punitive damages

Attorney fees
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What Does Personal Injury
Protection (PIP) Cover?
 Medical
payments or
funeral expenses for you,
your family members and
passengers in the car
 80%
of lost income and
cost of hiring a caregiver
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Rental Reimbursement and
Towing and Labor Coverage
Rental reimbursement
pays a set amount for a
rental car while your cr is
repaired or for a specific
time if it is stolen.
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What Does Uninsured
Motorist Pay?
Bodily
injury
Property
damage
Covers
you, your family
members and
passengers in your car,
as well as others driving
your car with permission
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Factors That Affect Auto
Insurance Rates

Type and level of coverage needed

Age and driving experience

Gender

Model of the car

Where you live

Vehicle use

Driving record, grades and insurance history
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Ways to Lower Your Premium

Bundle auto and homeowners policies with the same
company

Buy a vehicle that is not a target for theft

Ask for a higher deductible

Decrease your liability coverage

Have features such as airbags, anti-lock brakes and antitheft devices

Place teens as occasional drivers on your least
expensive car
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Homeowners Insurance
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Homeowners Insurance

Homeowners insurance - covers the home and the
contents of the home

Property coverage

Liability coverage

Appraisal

Renters insurance
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Factors That Affect the Cost of Home
Insurance

Type and amount of coverage

Size of the deductible

Risk factor where you live

The insurance company

Opportunity for discounts
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Medical Insurance
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The Importance of Medical
Insurance

Medical insurance provides
payment to cover financial
loss as a result of illness or
injury.

Medical care is expensive,
so adequate health
insurance is an important
component of your
financial plan.
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Sources of Medical Insurance

Two Government Programs

Medicare for individuals
over 65 years of age or
disabled individuals who
qualify for social security

Medicaid-for low-income
individuals that covers
blind, disabled and
needy families with
dependent children

Employer-provided
insurance where there is
a group plan and the
employer covers some or
most of the cost

Private insurance where
a person purchases
health insurance through
a private company
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Indemnity Plans versus
Managed Care

Indemnity plans allow
participants to seek
health care from any
qualified medical
provider

Managed care plans
limit participants to a
specific list of
providers
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Family Coverage

The person who buys the
policy or subscribes to it
through an employer is
known as the
policyholder.

Children become
ineligible when they
reach a certain age.
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Group Plans

Group plans cover a large
group of individuals, such
as all the employees of a
particular company or
local government.

Within a group,
individuals’risk is spread
across the entire pool of
members.
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Location Restrictions

Some insurance companies
will only provide medical
care in the United States.

You may want to purchase
travel insurance if you
travel outside the United
States.
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Pre-existing Conditions

Insurance policies
may exclude
coverage for preexisting conditions or
health conditions
that existed before
the policy was
granted.
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Deductibles

Many policies limit the total amount they will pay
for some procedures

Some companies cover only certain drugs or
provide partial payment for unapproved drugs

Many policies have a co-pay, where the
policyholder pays a set amount for a doctor visit
or emergency room visit
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Provider Networks

Two most common
networks

Health Maintenance
Organizations (HMO’s)

Preferred Provider
Organizations (PPO’s)
Both HMO’s and PPO’s provide a list of
providers. HMO’s usually provide a more
limited list.
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Comparison of Insurance Plans
Type of Health Plan
Premium
Selection of Physician
Indemnity Plan
High
Flexibility to select a
physician or specialist
Managed Care
HMO
Relatively low
Primary care physician
refers the patient to
specialist
Managed Care
PPO
Low, but usually
higher than HMO
Greater number of
physicians to choose
from with PPO’s than
HMO’s
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When You Leave a Job

Consolidated Omnibus
Budget Reconciliation Act
(COBRA) allows you to
continue health insurance
coverage for up to 18
months after your
employment ends.
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Disability Insurance
The ability to earn a living is one of your most valuable assets.
Disability insurance covers your wages if you are in an accident
or too ill to work for an extended period of time.
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Life Insurance
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Life Insurance

Life insurance provides payment to a
specific person when the policyholder
dies. This person is known as the
beneficiary.
Whole life insurance can build up savings
for the policyholder over time and the
policyholder may borrow from the “cash
value” of the policy
 Term insurance provides insurance over a
specified period of time.
 Universal life insurance is a combination of
term and whole life, giving the policy more
flexibility.

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Term Life Insurance
Provides protection only for a specific period of time
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Whole Life Insurance
Provides basic lifetime protection so long as premiums are paid
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Questions?
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References and Resources
Images:
Microsoft Clip Art: Used with permission from Microsoft.
Textbooks:
Ross Lowe, 2006. Consumer education & economics, student edition. 6 Edition. Glencoe/McGraw-Hill
Madura, Jeff, Mike Casey, and Sherry J. Roberts. Personal financial literacy. Boston: Pearson, 2010. 23-29. Print.
Websites:
All Insurance Information Organization. Great site for general insurance information.
http://allinsuranceinfo.org/
Federal Trade Commission
Filing for Bankruptcy: What you should know.
http://www.consumer.ftc.gov/articles/0224-filing-bankruptcy-what-know
Insurance 411 Organization
Web tool to make a credit card size insurance information card to carry in your wallet.
http://insurance-411.org/
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References and Resources
Money Matters
Financial Education Curriculum produced by First Command Educational Foundation, 2010.
http://www.fcef.com
NEFE High School Financial Planning Program
National Endowment for Financial Education.
http://www.hsfpp.org/
Privacy Rights Clearing House
Information on record Keeping.
https://www.privacyrights.org/fs12a-personal-data-retention-and-destruction-plan#whykeep
Record Keeping and Personal Care Guide
Create personal records for the family.
http://ddc.ohio.gov/Pub/RecordGuide.pdf
Texas Department of Insurance
Consumer information guide for purchasing insurance.
http://www.tdi.texas.gov/pubs/consumer/cb088.html
Texas Financial Responsibility Report
Information on Texas law concerning auto insurance.
http://www.tdi.texas.gov/pubs/consumer/cb088.html
United States Courts
Information on Bankruptcy.
http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics.aspx
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