7.10.1.

L1 Note taking guide

Types of Insurance Essentials Note-Taking Guide

Drake Name__________________
39 Total Points Earned Total Points Possible Percentage
INSURANCE Policyholder:

Date__________________ Class _________________

Risk:

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

Policy:
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

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 are caused to other people or their 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

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

no

covers the insured

anyone in the insured vehicle

covers the other vehicle

covers 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?

to protect individuals from high medical costs

financial losses resulting from injury, illness, and disability

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

an individual or their employer

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

LIFE INSURANCE Life insurance: Beneficiary: Dependent: Who should purchase life insurance?
have a dependent spouse, dependent children, an aging or disabled dependent relative, or are business owners

contract between an recipient of any policy insurer and proceeds if the policyholder specifying insured person dies. a sum to be paid to a beneficiary upon the insureds death

recipient of any policy proceeds if the insured person dies.

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

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

60-70% percent of their income

HOMEOWNERS AND R ENTERS INSURANCE Peril:

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

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, liability protection, and provides additional living expenses

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