Coach Johnson

1
Personal Insurance and Employee Benefits

• Coach Johnson
• Understanding Business and Personal Law

2
Vocabulary

• Insurance
• Insurer
• Policy
• Policy Holder
• Insured
• Beneficiary
• Rider
• Insurable Interest
• Premium
• Face Value
• Case Value

• Life Insurance
• Straight Life Insurance (Whole)
• Annuity
• Term Insurance
• Endowment Insurance
• HMO
• Medicare
• Medicaid

3
What is Insurance?

• Contractual Agreement
• Prevents Loss
• Indemnify- pay for a parties loss (make good)
• Insurer (Company State Farm, Geico, etc)
• Covered or Protected Party- Insured
• Beneficiary- Recipient of amount to be paid
• Policy- Written Contract of Insurance (Binder
  before)
• Face Value- Maximum paid out
• Premium- What you pay for the insurance

4
Life Insurance

• Pays a beneficiary after death of policy holder
• Three common types of life insurance
• Term
• Specific time period
• Cheapest form (why?)
• Increase at end of term (why?)
• Whole Life
• Paid throughout entire life
• Payments never increase (why?)
• Gains cash value (why?)
• Endowment Life
• Specific amount and time
• Paid at end of term or to beneficiary (if you die
  before)
• Also Accidental Death and Dismemberment
  Insurance
• Pays face value if you die in accident (to
  beneficiary)
• Pays other amounts based on disabilities

5
Disability Insurance

• Paid when workers are not able to work
• Only pays a of your normal pay
• Pay premiums to private company through employer
• Physical or Mental
• Two Major Types
• Short Term
• Pregnancy
• Minor Injury
• Long Term
• Major Injury
• Permanent disability

6
Disability Examples

• These are considered severe enough to meet the
  test of disability
• Loss of both arms, both legs, or a leg and an arm
• Heart and lung disease
• Progressive cancer
• Brain damage that results in loss of judgment or
  memory
• Loss of vision, inability to speak, deafness

7
Health Insurance

• Basic Health Insurance covers
• Inpatient and outpatient hospital care
• Physician Care (Doctors Visit)
• Surgery
• Prescription Drugs
• Dental and Vision (sometimes separate)
• Major Medical (must be added)
• Pays for expenses beyond normal charges (long
  stay, terminal illness)

8
Insurance Information

• Group Plans
• Purchased by individuals who work for companies
• Usually cheaper (why?)
• Sometimes employee pays part of premium
• COBRA
• Keeps employees insured after loss of job
• Individual Plans
• Covers same thing as group policies
• More expensive

9
More Insurance??

• Three major types of Policies
• HMO (Health Maintenance Organization)
• Members include doctors, insurance companies,
  labor unions, corporations
• Must choose from list of providers
• Larger Network, Lower Coverage
• PPO
• Must choose from list of providers
• Will cover only part costs if out of network
  (provider)
• Smaller Network, Higher Coverage
• HRA (Health Reimbursement Account or Arrangement)
• Account pays for medical costs up to a certain
  amount
• You pay full out of pocket costs until deductable
  is reached
• After, it pays normal

10
Government Healthcare

• Medicare
• Over 65 years of age
• Covered by Social Security
• Part A- inpatient hospital care
• Part B- 80 of doctors and other medical
• Medicaid
• Low income people
• Funded by state and federal funds