Enterprise: ManagementJob: Using Insurance to reduce riskObjective: Learn what insurance is and how to decide what insurance you need. • 1. What is insurance and why is it important to you? • 2. What are the two reasons to buy life insurance? • 3. Explain the difference between term, straight, limited payment and endowment life insurance: • What are the functions of Health insurance?
5. List the four areas that health insurance covers: • 6. What does property insurance cover? • 7. Who administers crop insurance and what does it cover? • 8. List and explain the types of auto insurance:
9. What factors are used to determine the price of auto insurance? • 10. List and explain the two types of insurance companies. • 11. Who else can we get insurance from? • 12. What are the two importance criteria in determining if comprehensive personal liability insurance is needed?
13. Under workman's compensation, What benefits are the employee’s eligible for?
1. Insurance is a method of managing risk and uncertainty. • 2. The first reason to buy insurance is to provide protection against the loss of income due to the premature death of the breadwinner, and the second reason is to provide a means of savings and investment.
3. Term is the purest form of insurance you pay for the insurance and as long as you are paying you have insurance. • Straight life - (whole) insurer pays a fixed price for insurance usually higher at first than term but does provide some savings • limited payment- similar to straight yet payments are higher and then the interest
Earned on the premiums kicks in and starts paying the premiums. There is even more savings. • Endowment - this is a policy in which when you finish paying over a number of years you can cash the policy in for the face value. Costs the most.
4. The functions of health insurance are: • a. protect against the financial hardship due to illness or injury • b. covers cost of medical care to insure competent treatment • c. protects creditors by insuring policy holders ability to repay debt
5. The four areas of health insurance are: • a. hospital expense- covers hospital room and board. • B. surgical expense- this pays for all or part of surgical fees • c. regular- this policy pays for doctors visits. • D. Major medical- this provides coverage for large medical expenses.
6. Property insurance insures against loss due to fire, hail and wind storms. Can then get extra coverage for riots civil commotion, vehicles, and smoke. • 7. A special division of the USDA administers crop insurance. This insurance covers crop loss regardless of cause and will also cover decreased quality. Management tool that farmers need to consider.
8. The types of auto insurance are: • A. Liability- this insurance pays for bodily injury and damage to others when insurer is responsible ( ) • b. medical payment- pays of insured and passengers medical fees regardless of blame. • C. uninsured motorist- covers insured, spouse and children is struck by uninsured
D. collision- pays damage to insured’s care if it hits another vehicle or object. • E. comprehensive - covers loss caused by fire wind, theft, vandalism, collision with animal, etc. • F. ad&d- pays a lump sum for death in car accident also pays lump sum for loss of limb, blindness, and such.
9. Insurance companies use the following factors to figure premiums: • a. Age < 25 • b. location of vehicle • c. protection desired • d. accident history • e. use of vehicle
10. The two types of insurance companies are: • a. Stock - protects customer and stockholders profit • b. Mutual - policy holders are the owners can profit, but might also have to pay extra if losing money.
11. You can also get insurance from ag. Organizations. ( ), and the government ( ). • 12. The two major factors to determine this is the # of employees and the type of work.
13. Under workman's compensation the employee is eligible for medical expenses, hospital service, and pay to the employee. This insurance will pay up to 401 weeks and provide spouse with payment for life if death occurs. This insurance is not mandatory