Personal Finance 207 Ch 8-9

Main coverage of automobile insurance categories

-Bodily Injury Coverage -Property Damage Coverage

Major Provisions in a Health Insurance Policy

-Eligibility -Assigned benefits -Internal limits -Service benefits -Benefit limits -Exclusions and limitations -Coordination of benefits -Guaranteed renewable -Cancellation and termination

Sources of Disability Income

-Private Income Insurance Programs -Employer Plans -Social Security -Workers' Compensation

Health Insurance and the Patient Protection and Affordable Care Act of 2010

-Prohibits denying coverage to children with preexisting medical conditions. -Bans insurance companies from dropping people from coverage when they get sick. -Eliminates co-pays for preventive services. -Ensures access to an effective appeals process by the health insurance plan.

Health Insurance Trade-Offs

-Reimbursement vs. indemnity -Internal limits vs. aggregate limits -Deductiables and coinsurance -Out-of-pocket limit -Benefits based on reasonable and customer charges

Which Coverage to Choose:

-Should get a basic plan and a major medical supplementary plan or -comprehensive major medical policy that combines the values of both these plans in a single policy

Auto Insurance Cost is related to

-Vehicle -Place of Residence -Driving Record

Disability Insurance Trade-Offs

-Waiting or elimination period -Duration of Benefits -Amount of Benefits -Accident and sickness coverage -Guaranteed renewability

Vision Care Insurance

A recent development in health care coverage has been vision care insurance.

Employer Self-Funded Health Plans

Certain types of health insurance coverage are made available by plans that employers, labor unions, fraternal societies, or communities administer. Usually, these groups provide the amount of protection that a specific group of people desires and can afford.

Step 4:

Check your results.

Preferred Provider Organizations (PPO)

Combine the best elements of the fee-for-service and HMO systems. This provides the services of doctors and hospitals at discount rates or give breaks in co-payments and deductibles.

COBRA

Consolidated Omnibus Budget Reconciliation Act of 1986. Allows workers to keep their former employer's group coverage for a set period of time. Not everyone qualifies.

Individual Health Insurance

Covers either one person or a family.

Personal Property Floater

Covers the damage or loss of a specific item of high value not covered by the personal property policy limits.

Comprehensive Physical Damage

Covers you for such risks as fire, theft, glass breakage, falling objects, vandalism, wind, hail, or damage caused by hitting an animal.

Step 2:

Develop a plan to reach your goals

Medicare

Federal health insurance program for people 65 or older, and certain disabled people.

Health Insurance

Form of protection whose primary purpose is to alleviate the financial burdens suffered by individuals because of illness or injury.

Uninsured Motorists Protection

If in an accident caused by a person without insurance, this covers the cost of injuries to you and your family but, not property damage.

Renter's Insurance Coverage

Includes personal property protection, additional living expenses, and personal liability and related coverage.

Home Insurance Cost Factors

Location of residence, construction materials of building, policy type

Hospital Indemnity Policies

Pays benefits only when you are hospitalized, but these benefits are paid to you in cash.

Additional Living Expense Coverage

Pays for the cost of living elsewhere in case of fire or other damage.

Hospital Expense Coverage

Pays part or all of hospital bills for room, board, and other charges.

Assigned Risk Pool

People who are unable to obtain automobile insurance with some of these individuals assigned to each company operating in a state.

Pure Risks

Personal risks, property risks, and liability risks.

Homeowner's insurance covers:

Place of residence and its associated financial risks, such as damage to personal property and injuries to others.

Insurance

Protection; protects people against possible financial loss.

A No-Fault insurance system

Provides for drivers in an accident to collect medical expenses, lost wages, and related injury costs from their own insurance company.

Step 3:

Put your plan to action.

Step 1:

Set Insurance Goals

Risk-Shifting

The most common method of dealing with risk is to shift, or transfer, it to an insurance company or some other organization.

Medicaid

Title XIX of the Social Security Act provides for a program of medical assistance to certain low-income individuals and families.

No-Fault Insurance

Under this system, drivers who are involved in accidents collect money from their own insurance companies.

Risk Reduction

Wearing a seat belt.

Property Damage Liabilty

When you damage the property of others, this protects you against financial loss including vehicles, street signs, lampposts, and buildings.

Collision

When your automobile is involved in an accident, this insurance pays for the damage to the automobile regardless of who is at fault.

Health Maintenance Organizations (HMO)

a health insurance plan that directly employs or contracts with selected physicians, surgeons, dentists, and optometrists to provide you with health care services in exchange for a fixed, prepaid monthly premium.

Insurance Company

a risk-sharing firm that agrees to assume financial responsibility for losses that may result from an insured risk.

Flexible Savings Accounts

allow employees to contribute pretax dollars to an account managed by an employer.

Health Saving Accounts

allow you to contribute money to a tax-free account that can be used for out-of-pocket health care expenses.

Risk Management

an organized strategy for protecting and conserving assets and people.

Group Health Insurance

are employer sponsored who pay some or all of the premiums.

Risk Avoidance

avoiding potential risk situations. (Not ride in a car, no accident)

Driver Classification

category based on the driver's age, sex, marital status, driving record, and driving habits.

Medical Payments Coverage (Auto)

covers the cost of health care for people who were injured in your automobile, including yourself.

Long-Term Care Insurance

day-in, day-out help that you could need if you ever have an illness or disability that lasts a long time and leaves you unable to care for yourself.

Bodily Injury Liability

for the risk of financial loss due to legal expenses, medical expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for which you were responsible.

Health Reimbursement Accounts

funded solely by your employer.

Home Health Care Agencies

furnish and are responsible for the supervision and management of preventive medical care in a home setting in accordance with a medical order.

Physician Expense Insurance

helps pay for physician's care that does not involve surgery.

Basic Health Insurance Coverage

includes hospital expense insurance coverage, surgical expense coverage, and physician expense insurance.

Hazard

increases the likelihood of loss through some peril.

Medigap Insurance

intended to supplement Medicare is not sold or serviced by the federal government or state governments. Many private insurance companies sell this.

Household Inventory

list or other documentation of personal belongings, with purchase dates and cost information.

Actual Cash Value (ACV)

method of claim settlements, the payment you receive is based on the current replacement cost of a damaged or lost item less depreciation.

Replacement Value

method of claim settlements, you receive the full cost of repairing or replacing a damaged or lost item; depreciation is not considered.

Towing and emergency road service

pays for the cost of breakdowns and mechanical assistance.

Surgical Expense Coverage

pays part or all of the surgeon's fees for an operation.

Medical Payments Coverage (Homeowners)

pays the cost of minor accidental injuries on your property and minor injuries caused by you, family members, or pets away from home.

Liability Risks

possible losses due to negligence resulting in bodily harm or property damage to others.

Main component of homeowner's insurance

protection against financial loss due to damage or destruction to a house or other structures.

Major Medical Expense Insurance

protects against the large expenses of a serious injury or a long illness.

Disability Income Insurance

provide regular cash income lost by employees as the result of an accident, illness, or pregnancy.

Under-insured Coverage

provides financial protection when another driver has insurance but less coverage than needed to cover the financial damages brought upon you.

Dental Expense Insurance

provides reimbursement for the expenses of dental services and supplies.

Exclusive Provider Organizations (EPO)

reimbursed on a fee-for-service basis according to a negotiated discount or fee schedule.

Point of Service Plans (POS)

sometimes called HMO-PPO hybrid or open-ended HMOs, combine characteristics of both HMOs and PPOs.

Financial Responsibility Law

state legislation that requires drivers to prove their ability to cover the cost of damage or injury caused by an automobile accident.

Blue Cross and Blue Shield

state-wide organizations similar to commercial health insurance companies

Umbrella Policy (Personal Catastrophe Policy)

supplements your basic personal liability coverage.

Risk Assumption

the act of taking on responsibility for the loss or injury that may result from a risk.

Peril

the cause of a possible risk.

Self-Insurance

the process of establishing a monetary fund that can be used to cover the cost of a loss.

Property Risks

the uncertainties of direct or indirect losses to personal or real property due to fire, wind, accident, theft, and other hazards.

Personal Risks

the uncertainties surrounding the loss of income or life due to premature death, illness, disability, old age, and unemployment.

Risk

the uncertainty as to loss that faces a person or property covered by insurance.

Medicare and Medicaid

two sources of government health insurance

Dread Disease Policies

usually solicited through the mail or ads; poor values.

Wage Loss Insurance

will reimburse you for any salary or income lost due to injury in an automobile accident.