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Understanding Health and Life Insurance

Insurance provides financial protection from risks like illness, accidents, death, and property damage by shifting the burden of these potential large costs from individuals to a large pool of insured individuals through a process where regular premium payments are made in exchange for coverage of losses. Common types of insurance include health, life, disability, property, and liability insurance which can be obtained through employers, private insurance companies, or government programs depending on needs and eligibility. Understanding key insurance concepts like premiums, deductibles, coverage, policies, and claims processes helps individuals choose and make use of appropriate insurance options.

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Billy JO
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452 views18 pages

Understanding Health and Life Insurance

Insurance provides financial protection from risks like illness, accidents, death, and property damage by shifting the burden of these potential large costs from individuals to a large pool of insured individuals through a process where regular premium payments are made in exchange for coverage of losses. Common types of insurance include health, life, disability, property, and liability insurance which can be obtained through employers, private insurance companies, or government programs depending on needs and eligibility. Understanding key insurance concepts like premiums, deductibles, coverage, policies, and claims processes helps individuals choose and make use of appropriate insurance options.

Uploaded by

Billy JO
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Introduction to Insurance: Provides an introductory overview of insurance, explaining the fundamental concepts and purpose of insurance policies.
  • Why Insurance Matters: Discusses the importance of insurance in risk management and financial protection for individuals.
  • Basic Insurance Terms: Defines key insurance terms necessary for understanding policy documents and discussions.
  • How Insurance Works: Explains the risk pooling mechanism and financial transactions involved in insurance coverage.
  • The Insurance Process: Details the step-by-step process involved in submitting claims and receiving payouts from insurance providers.
  • Understanding Deductibles: Covers the concept of deductibles and their impact on insurance premiums and claims.
  • Types of Insurance: Lists and briefly describes various types of insurance policies available to consumers, including health and life insurance.
  • Where to Get Insurance: Identifies different sources and providers from which individuals can obtain insurance.
  • Health Insurance Coverage: Explores the benefits and coverage provided by health insurance, including specific considerations for different populations.
  • Types of Health Insurance: Differentiates between HMO and PPO health insurance, highlighting their advantages and limitations.
  • Disability and Long-term Care: Discusses insurance options available for disability and long-term care needs, including financial implications.
  • Health Insurance WebQuest: Provides an interactive activity for exploring health insurance options and choosing the best one for individual needs.
  • Life Insurance Overview: Explains the purpose of life insurance, how it is calculated, and its benefits for beneficiaries.
  • Whole Life Insurance: Describes whole life insurance, covering its components and benefits compared to other types.
  • Term Life Insurance: Examines term life insurance policies and discusses their cost-effectiveness and flexibility compared to whole life insurance.
  • Estate Planning Basics: Provides information on estate planning, focusing on wills and the role of executors.

Insurance 101

Part 1: Terms, Health Insurance, and Life Insurance


Why should you have insurance?
To manage the risk that something bad may happen to you
Emergency Savings:
3-6 months of living
Risk: chance expenses saved in a
of loss from liquid account
an event
Managed by:
that cannot Insurance:
be Financial product
purchased to protect
controlled against risk of loss
Need to Know Insurance Terms
Policy: a contract between the insurance company and
the insured that states exactly what is covered
Coverage: the risks covered and the amount of money
the insurance company will pay to cover losses
Policyholder: person who owns the policy
Premium: money paid each month to purchase the
policy
How Insurance Works!
100 people in a There is a 1%
Health Insurance chance one person But, how do you
Group in the group will know who that one
need $10,000 person is? Or what
medical care they will need?

Insurance shifts the risk of big loss


from the individual to the insurance company
Each person in the In this situation,
group pays $100 to Everyone in the 99 people did not
cover their insurance. group gives up collect anything,
This money totals $100, but no one but gained peace of
$10,000 to cover the will lose more than mind that they
medical costs if
someone gets sick.
$100. have protection.
Claim: a formal request
The Insurance Process to an insurance
company asking for
1. Event occurs resulting in loss payment when the
policyholder has an
2. Policyholder makes a claim accident, illness, or
to the insurance company injury
3. Insurance decides if the
event is covered by that
Deductible: the out-of-
policy pocket money paid by
4. If so, policyholder pays a the policyholder before
deductible an insurance company
will cover any costs
5. Insurance company then
pays the rest (in most cases)
The higher your deductible,
Deductibles the lower your monthly
premium.
The amount you have to
pay if you file a claim The lower your deductible,
the higher your monthly
Ex: If you have an accident and there
is $1000 in damage and you have a premium.
$200 deductible, you pay $200 and
the insurance company pays $800If you are willing to pay a
higher deductible, the

$$ $$$$$$$$ insurance company is willing


to have you pay less
YOU Insurance Company monthly.
Types of Insurance

Health Disability Property

Long-
Life term Liability
care
Where Can You Get Insurance?
Insurance Company Government

● Long-term care ● Specialty programs for


● Property those in need- you must
● Liability qualify for these
programs
Employer

● Health
● Disability
● Life
Think About It...
Have you ever broken a bone?
Been sick? Needed medicine?
Needed surgery?
Worn glasses? Been to the dentist?
Health insurance is how you can afford to see
someone to treat your needs.
Health Insurance
Provides money to pay for The government provides
health care insurance for citizens in
need through Medicare
Provided by: Employer,
(seniors and disabled) and
Individual, or Government
Medicaid (low income).
IF your employer does not
Risks covered: Doctor visits,
provide health insurance,
hospital bills, vision care,
you can purchase directly
dental care, prescription
from a provider through the
drugs
Affordable Care Act
Types of Health Insurance
HMO- Health Maintenance PPO- Preferred Provider Organization
Organization
● Policyholder can choose their
● Doctor signs a contract with the primary care doctor and
HMO specialists with no pre-
● Policyholder must be seen by an authorization
in-network doctor ● In-network doctors will charge a
● Policyholder must see their lower fee than out-of-network
Primary Care Doctor BEFORE doctors
being referred to a specialist ● Premiums are higher
● Premiums are lower
In-network: group of doctors and
Based on idea that preventative hospitals that agree to provide
services will minimize future medical specific medical services to members
needs at prearranged fees
What if a person cannot work or live
independently?

Disability Insurance: Long-term care insurance:


Payment to replace earnings payment for nursing care
when you can’t work due to when a person cannot live
illness or injury independently (ex: nursing
home)
You are going to explore health
Health insurance options and choose which

Insurance
you think is the best option for you!

Open the Health Insurance


WebQuest WebQuest assignment in Google
Classroom- you will complete online
and turn-in to the assignment in GC.

(30 minutes)
Life Insurance How is life insurance
calculated?
Payment to beneficiaries who
were named to the insured ● Company makes a rough
person guess about a person’s life
span
Beneficiary: someone who ● Sets premium accordingly
receives money if an insured ● The sooner a person is likely
person dies to pass away, the higher the
premium will be
If your death would cause
financial hardship for someone or
Two types:
a group of persons, you need life 1. Whole life insurance
insurance. 2. Term life insurance
Whole Life Insurance
Also known as universal life: you have it for your whole life
Policy includes both an insurance and an investment part

Insurance part pays a stated Investment part accumulates


death benefit or face value all of the premiums you paid,
when you die called the cash value
Ex: $500,000 If you surrender (cancel) the
This is the money received policy, you get the premiums
when you die (death benefit) you have paid plus interest
Term Life Insurance
A policy with a set time period (term)
Ex: 10, 20, or 30 years
When the term ends, you have to buy a new
insurance policy
Usually less expensive than whole life and gives
you the flexibility to change your policy
Where will your assets go when you die?
Will: a document that states who will get your
assets when you die
Executor: the person you name in the will that is
in charge of making sure that all the directions
you set are followed (needs to be someone you
trust!)

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