Personal Insurance and Employee Benefits

Personal Insurance and Employee
Coach Johnson
Understanding Business and Personal Law
 Insurance
 Life Insurance
 Insurer
 Straight Life Insurance
 Policy
 Policy Holder
 Insured
 Beneficiary
 Rider
 Insurable Interest
 Premium
 Face Value
 Case Value
Term Insurance
Endowment Insurance
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
Life Insurance
 Pays a beneficiary after death of policy holder
 Three common types of life insurance
1. 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
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
Disability Examples
 These are considered severe enough to meet the test of
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
Health Insurance
 Basic Health Insurance covers:
 Inpatient and outpatient hospital care
 Physician Care (Doctor’s Visit)
 Surgery
 Prescription Drugs
 Dental and Vision (sometimes separate)
 Major Medical (must be added)
 Pays for expenses beyond normal charges (long stay, terminal illness)
Insurance Information
 Group Plans
 Purchased by individuals who work for companies
 Usually cheaper (why?)
 Sometimes employee pays part of premium
 Keeps employees insured after loss of job
 Individual Plans
 Covers same thing as group policies
 More expensive
More Insurance??
 Three major types of Policies
 HMO (Health Maintenance Organization)
 Members include doctors, insurance companies, labor unions,
 Must choose from list of providers
 Larger Network, Lower Coverage
 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 %
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
Low income people
Funded by state and federal funds

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