Types of Insurance

Essentials

by

4th year student

Contents

GENERAL INFO

1. Automobile Insurance

2. Health Insurance

3. Life Insurance

4. Disability Insurance

5. Homeowner’s Insurance

SUMMARY

What is Insurance?

Risk is the uncertainty about a situation’s

outcome- may be an unpredictable event which leads to loss or damage

Insurance is an

arrangement between an

individual (consumer)

and an insurer (insurance

company) to protect the

individual against risk

Helps limit financial losses

when an accident occurs

Helps an individual/family be prepared for the unexpected

Plays a large role in most

financial management

plans

Why is it important to have

insurance?

What is an Insurance Policy?A policy is a

contract between

the individual and

the insurer

specifying the

terms of the

insurance

arrangements

A premium is a

fee paid to the

insurer to be

covered under

specified terms

outlined in the

policy

A deductible is the

amount paid out of

pocket by the

policyholder for the

initial portion of a loss

before the insurance

coverage begins- the

deductible is stated in

the policy

A policyholder

is a consumer

who purchases

the policy

Types of Insurance

Types of Insurance

Automobile

Health

LifeDisability

Homeowners/

Renters

Automobile Insurance Automobile Insurance -arrangement between an individual (consumer) and

insurer (insurance company) to protect the individual against risk

from automobile accidents

Liability

insurance

Medical

payment

insurance

Uninsured or

underinsured

motorists

insurance

Physical

damage

insurance

Collision

Comprehens

ive

Types of Auto Insurance

Liability Insurancecovers the insured if

injuries or damages are caused to other people

or their property

It is the minimum

amount of insurance

required by law for

automobiles

Medical Payment

Insurance covers

injuries sustained by

the driver of the

insured vehicle or any

passenger regardless

of fault

It also covers family

members injured as

passengers in any car,

pedestrians, or

bicyclists

Health Insurance

Health insurance provides protection against financial losses resulting from injury, illness, and disability May cover hospital, surgical, dental, vision, long-

term care, prescription, or other major expenditures

Specific coverage depends upon the individual policy

Health care costs are extremely high

Large medical expenses could deplete an individual’s savings

Why would it be important to have health

insurance?

Life Insurance

Life insurance is a contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insured’s death

• A beneficiary is the recipient of any policy proceeds if the insured person dies

Provides money for family members

or dependents when a wage earner

dies • A dependent is a person who relies on

someone else financially

Disability Insurance

Disability Insurance replaces a portion

of one’s income if they become unable

to work due to illness or injury

Insurance typically pays between 60-

70% of one’s full-time wage

Factors such as the length or severity of a

disability influence the percentage of

income a person will receive

Homeowner’s Insurance

Homeowner’s Insurance -combines property and liability insurance into one policy to protect a

home from damage costs due to perils

Peril -an event which

may cause a

financial loss like fire,

falling trees, lightning

and others

Property Insurance -

protects the insured from

financial losses due to

destruction or damage to

property or possessions

Liability Insurance-

protects the insured

party from being held

liable for other’s

financial losses

Summary

What is insurance?

What is the purpose of insurance?

An arrangement between an individual

(consumer) and an insurer (insurance

company) to protect the individual against

risk

The purpose of insurance is to help

individuals limit their financial losses when

an accident occurs

What is a premium and a deductible?

What are the different types of insurance?

Summary

• A premium is the fee paid to the insurer to be covered

under the specified terms

• A deductible is the amount paid out of pocket by the

policy holder for the initial portion of a loss before the

insurance coverage begins

Automobil

e Health

Life

Disability

Homeowner’s

THANKS FOR YOUR ATTENTION!

author