7.10.1.

L1 Note taking guide

Types of Insurance Essentials Note-Taking Guide

Karly Cook Name__________________
39 Total Points Earned Total Points Possible Percentage
INSURANCE Policyholder:

4/10/2014 Date__________________

2nd Period Class _________________

Risk:

Insurance:

Policy:
A contract between the individual and the insurer specifying the terms of the insurance arrangements

The person who bought the policy

Premium:
A fee paid to the insurer to be covered under the specified terms

Uncertainty about a situations outcome

An arrangement between an individual and an insurer to protect the individual against risk

Deductible:
the amount paid out of pocket by the policy holder for the initial portion of a loss before the insurance coverage begins

AUTOMOBILE INSURANCE Liability Medical payment

Covers injuries received by the driver of the insured vehicle or any passenger regardless of whose fault it was. It also covers insured family members injured as passengers in any car or if they are injured while walking on foot or while riding a bicycle.

Types

Covers the insured if injuries or damages are caused to other people or their property.

Uninsured/under insured

Physical damage
Covers damages caused to the vehicle

Covers injury or damage to the driver, passengers, or the vehicle caused by a driver with insufficient insurance.
Yes

Collision
Covers a collision with another object, car, or from a rollover

Comprehensive
Covers all physical damage losses except collision and other specified losses

Required by law Who/ what is covered

Yes

Yes

Yes

insured people

The drivers and passengers injuries

Injuries

damages

Family Economics & Financial Education October 2010 The Essentials to Take Charge of Your Finances Types of Insurance Page 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona

7.10.1.L1 Note taking guide

HEALTH INSURANCE Why is it important to purchase health insurance? Provides protection against: May cover: How may health insurance be purchased?

To provide coverage for emergency or routine medical expenses

Provides protection against financial losses resulting from injury, illness, and disability

Hospital, surgical, dental, vision, long-term care, prescription, and other major expenses

By an individual or through their employer

Children may stay on their parents health insurance until:

The age of 19
LIFE INSURANCE Life insurance:
A contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insureds death

Beneficiary:

Dependent:

The person who gets the benefits of someones death

A person who relies on someone else financially

Who should purchase life insurance?

People who have a dependent spouse, dependent children, an aging or disabled dependent relative, or are business owners

DISABILITY INSURANCE Disability insurance: If needed, how much does disability insurance pay an individual?

It replaces a portion of ones income if they become unable to work due to illness or injury.

60% 70% of ones full time wage

HOMEOWNERS AND R ENTERS INSURANCE Peril:

An event which can cause a financial loss like fire, falling trees, lightning, and others

Renters insurance:
It protects the insured from loss to the contents of the dwelling rather than the dwelling itself.

Homeowners insurance:

It combines property and liability insurance into one policy to protect a home from damage costs due to unfortunate events

Property insurance:
Protects the insured from financial losses due to destruction or damage to property or possessions

Why is it important for a renter to purchase renters insurance?

Because the landlords insurance policy on the dwelling does not cover the renters personal possessions.

Liability insurance:
It protects the insured party from being held liable for others financial losses

Covers:
It covers major perils, provides liability protection, and provides for additional living expenses if the dwelling is rendered uninhabitable by one of the covered perils.

Family Economics & Financial Education October 2010 The Essentials to Take Charge of Your Finances Types of Insurance Page 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona