Personal Finance- Unit 4 (Risk and Insurance)

PCP

A doctor or other licensed medical professional who manages a patient's health care over time. With some types of health insurance plans, a referral from a PCP is needed before seeing a specialist.

Risk

The probability of something bad or unpleasant happening, especially something that has a significant impact on your financial situation.

Risk Management

A process that involves identifying, assessing, and reducing the impact of risks that could impact your financial situation.

Premium

The amount of money a policyholder pays to an insurance company in exchange for coverage, usually monthly.

Deductible

The amount of money that an insured person pays before their insurance company starts paying for covered expenses.

Coverage Limit

The maximum amount an insurance company will pay for a covered claim. If a claim exceeds the coverage limit, the policyholder is responsible for paying the difference.

Out-of-Pocket

Paying for something with your own money (you don’t get any tax breaks and you don’t get your insurance company’s negotiated price).

Out-of-Pocket maximum

The most you or your family will pay for covered health care services in a calendar year.

Claim

A formal request to an insurance company for payment for a covered incident or loss.

Policy

A legal contract between an insurance company and a policyholder that outlines the terms and conditions of coverage.

Co-Insurance/Co-Pay

A contribution made by an insured person toward the cost of medical treatment or other services. This occurs in Stage 2 when the insured and the insurance company are sharing costs.

Liability Insurance

Protects you financially if you are held legally responsible for someone else's injuries or property damage.

Bodily Injury

A legal term that refers to any physical harm, damage, or impairment to a person's body.

Property Damage

Physical harm to a person's property, whether it's real (land, buildings) or personal, tangible or intangible. Property damage can include damage to a home, trees, driveway, or other property, and can also include intangible losses like data loss.

Term Life Insurance

A contract that provides coverage for a set period of time, usually 10–30 years, in exchange for regular premium payments.

Umbrella Policy

Insurance that provides additional liability coverage beyond the limits of your auto, home, or other insurance policies. Primarily for wealthy people at risk of being sued (pool, trampoline, dog, teenage driver, rental property).

High Deductible Health Plan

A health insurance plan with a higher annual deductible than traditional plans and typically a lower premium than other plans. (HDHP)

HSA

A savings account with tax benefits for people with a high deductible health plan (HDHP).