7.10.1.

L1 Note taking guide

Types of Insurance Essentials Note-Taking Guide

Sarah Smith Name__________________
39 Total Points Earned Total Points Possible Percentage
INSURANCE Policyholder:

4/10/14 Date__________________

4th period Class _________________

Risk:

Insurance:
is an arrangement between an individual (consumer) and an insurer (insurance company) to protect the individual against risk

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

consumer who purchased the policy

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

is uncertainty about a situations outcome

Deductible:
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 Uninsured/under insured Physical damage

covers damages caused to the vehicle

Types

covers the insured if injuries or damages caused to other peoples property

covers injuries sustained by the driver of the insured vehicle or any passenger regardless of fault

covers injury or damage to the driver, passengers, or the vehicle caused by a driver with insufficient insurance
No
driver, passengers, or the vehicle caused by a driver with insufficient insurance

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

No
insured family members and/or pedestrians and passengers in any car

No

the other person

damages to the vehicle

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?

Because health care costs are extremely high and it can be hard for the average person to afford health care

Financial losses resulting from injury, illness, and disability

hospital, surgical, dental, vision, long-term care, prescription, and other major expenditures

an individual or through their employer

Children may stay on their parents health insurance until:
they are 19 or while they are in college

LIFE INSURANCE Life insurance:

is a contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insureds death.

Beneficiary:

Dependent:

the recipient of any policy proceeds if the insured person dies

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:

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

If needed, how much does disability insurance pay an individual?

between 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:
protects the insured from loss to the contents of the dwelling rather than the dwelling itself

Homeowners insurance:

combines property and liability insurance into one policy to protect a home from damage costs due to perils.

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?

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

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

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