Auto, Homeowners, Medical and Life Insurance. Dollars and Sense

Transcription

1 Auto, Homeowners, Medical and Life Insurance Dollars and Sense

2 Copyright Copyright Texas Education Agency, These Materials are copyrighted and trademarked as the property of the Texas Education Agency (TEA) and may not be reproduced without the express written permission of TEA, except under the following conditions: 1) Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts and schools educational use without obtaining permission from TEA. 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only, without obtaining written permission of TEA. 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way. 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts, Texas Education Service Centers, or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from TEA and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty. For information contact: Office of Copyrights, Trademarks, License Agreements, and Royalties, Texas Education Agency, 1701 N. Congress Ave., Austin, TX ; phone ; copyrights@tea.state.tx.us Copyright Texas Education Agency, All rights reserved. 2

4 Terms to Know Appraisal Estate Asset Face amount Beneficiary Group insurance Cash value Co-pay Death benefit Deductible Open-enrollment period Premium Supplemental insurance Copyright Texas Education Agency, All rights reserved. 4

7 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 Copyright Texas Education Agency, All rights reserved. 7

8 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 Copyright Texas Education Agency, All rights reserved. 8

10 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 Copyright Texas Education Agency, All rights reserved. 10

11 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 Copyright Texas Education Agency, All rights reserved. 11

12 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. Copyright Texas Education Agency, All rights reserved. 12

13 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 Copyright Texas Education Agency, All rights reserved. 13

14 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 Copyright Texas Education Agency, All rights reserved. 14

15 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 Copyright Texas Education Agency, All rights reserved. 15

17 Homeowners Insurance Homeowners insurance - covers the home and the contents of the home Property coverage Liability coverage Appraisal Renters insurance Copyright Texas Education Agency, All rights reserved. 17

18 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 Copyright Texas Education Agency, All rights reserved. 18

20 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. Copyright Texas Education Agency, All rights reserved. 21

21 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 Copyright Texas Education Agency, All rights reserved.

22 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 Copyright Texas Education Agency, All rights reserved. 22

23 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. Copyright Texas Education Agency, All rights reserved. 23

24 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. Copyright Texas Education Agency, All rights reserved. 24

25 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. Copyright Texas Education Agency, All rights reserved. 25

26 Pre-existing Conditions Insurance policies may exclude coverage for preexisting conditions or health conditions that existed before the policy was granted. Copyright Texas Education Agency, All rights reserved. 26

27 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 Copyright Texas Education Agency, All rights reserved. 27

28 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. Copyright Texas Education Agency, All rights reserved. 28

29 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 Managed Care PPO Relatively low Low, but usually higher than HMO Primary care physician refers the patient to specialist Greater number of physicians to choose from with PPO s than HMO s Copyright Texas Education Agency, All rights reserved. 29

30 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. Copyright Texas Education Agency, All rights reserved. 30

31 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. Copyright Texas Education Agency, All rights reserved. 31

33 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. Copyright Texas Education Agency, All rights reserved. 33

37 References and Resources Images: Microsoft Clip Art: Used with permission from Microsoft. Textbooks: Ross Lowe, Consumer education & economics, student edition. 6 Edition. Glencoe/McGraw-Hill Madura, Jeff, Mike Casey, and Sherry J. Roberts. Personal financial literacy. Boston: Pearson, Print. Websites: All Insurance Information Organization. Great site for general insurance information. Federal Trade Commission Filing for Bankruptcy: What you should know. Insurance 411 Organization Web tool to make a credit card size insurance information card to carry in your wallet. Copyright Texas Education Agency, All rights reserved. 37

38 References and Resources Money Matters Financial Education Curriculum produced by First Command Educational Foundation, NEFE High School Financial Planning Program National Endowment for Financial Education. Privacy Rights Clearing House Information on record Keeping. Record Keeping and Personal Care Guide Create personal records for the family. Texas Department of Insurance Consumer information guide for purchasing insurance. Texas Financial Responsibility Report Information on Texas law concerning auto insurance. United States Courts Information on Bankruptcy. Copyright Texas Education Agency, All rights reserved. 38