- Understand the importance of insurance
- Determine your life insurance needs and design a life insurance program
- Describe the major types of coverage available and the typical provisions that are included
- Design a health care insurance program and understand what provisions are important to you
- Understand, buy, and maintain homeowner’s insurance in a cost-effective way
- Buy the automobile insurance policy that’s right for you
Reading For This Module:
Chapter 9/10 – Keown, Arthur, “Personal Finance: Turning Money into Wealth, Prentice Hall Publishing. 6thedition
Introduction: Life and Health Insurance
Determining the need for and selecting cost-effective life, health, disability, and long-term care insurance products are the objectives of this chapter. The purpose of life insurance and the underlying principles of risk pooling introduce the chapter.
Two methods for determining the need for life insurance and the level of coverage illustrate this step in the purchase process. Major types of life insurance and the different product variations are reviewed, as are strategies for selecting the type of policy that best matches individual needs. Common features of most insurance policies are considered. Choosing a cost-effective health care insurance plan requires an understanding of the major types of health insurance coverage and the typical provisions included. Characteristics of private and public health care providers are considered, as are strategies for controlling health care costs. Fundamental provisions that will adapt the health care policy to individual needs are discussed.
Next, the purposes of disability and long-term care insurance, sources of coverage, determination of coverage needs, and policy features are presented. Recommended buying strategies to help students select the company, agent, and policy are considered throughout the chapter.
Homeowner and Auto Insurance
As the term property and liability insurance implies, these policies provide multiple forms of defense and protection of assets.
First, property and liability insurance provides protection from unexpected damage expenses to repair or replace assets such as home, personal property, or auto. Second, the coverage protects from liability losses when the policyholder(s) is (are) judged to be the cause of damages or losses to others. Provisions of homeowner’s policies are introduced; strategies for selecting, buying, and maintaining a cost-effective policy are considered. The role of insurance credit scoring in premium determination is also explored. Features of an automobile policy are introduced, as well as driver and auto characteristics that determine policy costs and available discounts.
Dr. Waller Lecture: Insurance (video) (40:21)
This video covers Insurance. Life, Health, Auto & Liability insurance types are covered …..watch for the types of insurance, their options and ways they may change over time.
InsuranceLecturePowerPoint(.pptx 41sl, 1MB)
The information below is provided as additional reference material on the basics of insurance as well as the types of insurance.
Overview of Insurance (.pdf 3pp, 235KB)
Types of Insurance Information Sheet (.pdf 2pp, 114KB)
- Life insurance controls the financial effect on your family when you die
- There are two types of life insurance—term and cash-value, be prepared to know their differences
- Basic health insurance provides a combination of hospital, surgical, and physician expense insurance
- Major medical expense insurance covers medical costs not covered by basic health insurance
- There are six standardized HOs with different types and levels of insurance for homeowners and renters
- HOs have property insurance (Section I) and liability coverage (Section II).
- With an automobile insurance policy, there’s protection against bodily injury and against property damage all divided up in four parts
- Age, sex, driving record, and the insurance credit score affect the cost of automobile insurance; so do deductibles, and discounts