TI - Types of Insurance Module Overview
Types of Insurance Module Overview
Introduction
You discovered in the previous module the concept of insurance. In this module, you will learn the different types of insurance, coverage, and features. You will learn the terminology so that you can choose the appropriate plan or policy for your specific needs. Remember, that it is better to have insurance and not need it than to need it and not have it. By getting insurance to cover you, your family, and your property, you are also protecting your finances. In case of an accident, you should be confident that you are covered!
Essential Questions
- What are the different types of automobile insurance coverage?
- What is the common coverage for homeowner's and renter's insurance?
- How is the coverage amount determined?
- What coverages and features are available for health insurance?
- What is the financial responsibility of the insured for health coverage?
- What is COBRA?
- What insurance is provided for employees by the employer?
Key Terms
Insurance: promised payment for specific future losses should they occur in exchange for a payment called a premium
Insurer: a company that pays to compensate the policyholder for losses or damages as described in an insurance policy as long as the premium is paid
Insurance policy: a written contract between an insurer and a customer (the policyholder) describing the term of the insurance, what is covered, the cost of the premium and the deductible amount
Policyholder: the owner(s) of an insurance policy
Premium: the periodic payment for an insurance policy
Claim: a policyholder's official notification to the insurance company requesting payment of an amount due for a covered loss
Deductible: a dollar amount a policyholder pays before the insurer starts to make payments for a covered loss
Life Insurance: money paid to a designated person/group of people when you die
Risk: the probability that something negative may happen
Beneficiary: the person(s) who will receive the insurance payout in the event that you die
Estate: wealth and possessions left by someone to be divided after they die
Health Insurance: protects you from monetary losses associated with illness or bodily injury
Coverage: what the insurance company includes as part of the insurance policy
Benefits: specific services the insured is entitled to under the policy
Co-pay: a form of cost-sharing that requires the insured to pay a fixed dollar amount for a medical service or prescription
Co-insurance: a form of cost-sharing that requires the insured to pay a set percentage of medical expenses after the deductible has been met
Flexible Spending Account/FSA: allows people to put a set amount of wages into a special account without paying taxes on those wages. Money in this account can be used to pay for uncovered medical expenses such as co-pays, the deductible, and co-insurance payments
COBRA: a law that allows a person to continue to be covered under the company's health insurance plan for a specified amount of time as long as s/he pays for that coverage
Auto Insurance: a means of protecting you and others in the event of an accident, theft, etc.
Homeowner's and Renter's insurance: protects you from financial loss if your home is damaged or destroyed, a theft occurs, or you face certain types of medical or liability claims
IMAGE CREATED BY GAVS USING TAGXEDO