Taxes and insurance test

premium

the amount t you pay every month to have insurance

Affects how much a premium is

how old you are, health issues, how much your deductible is, car history, how new you car is

Risk assessment

a “safety check” that identify potential hazards

risk pooling

The practice of gathering a large group of people to share financial consequences of a specific risk

Liability

When in a car crash only pays for the car you damaged

Collision

Pays for your car even when you are at fault

Comprehensive

Pays for your car when it is an event not including a collision

Difference between LTD and health insurance

LTD is used when you become disabled and can’t work, the government will pay you half of your salary you had at your old job. Health insurance covers the cost of medicine, surgeries

Deductibles

The amount you have to pay before your insurance kicks in

Coverage limits

The absolute max amount of money an insurance company can pay until you have to pay out of pocket

How much do you pay vs. insurance companies

For minor issues you pay a higher percentage but for major catastrophes the insurance company will pay the majority

What are out of pocket expenses

the amount you pay that is not covered by insurance

Why should you get insurance

Its a way to manage risk so nothing turns into financial ruin

What is life insurance

You pay an insurance company to pay your loved ones when you die

What is a copay

A fee you pay for a specific medical service etc. at the time you receive it

What is an out of pocket max

The most you will pay in a year before your insurance company pays the rest

What are renters insurance limits

While your landlord covers the building, renters insurance covers your personal belonging if damaged or stolen but does not count for natural disasters

Homeowners vs. renters insurance costs

De[ends on what is being insured, homeowners insurance covers the building, renters insurance covers your personal belongings

Mandatory vs. discretionary spending

Mandatory is spending money that is mandated by laws, the government can’t change the. discretionary spending is the money you spend that is controlled by the government

What are withholdings

portions of your earning that your employer has to take out and send to the government

Gross vs. net pay

Gross pay is the money you earn without taxes and net pay is the money you earn with taxes

1040

What Americans use to file their annual income tax

W4

Tell your employer how much you want to withhold from your paycheck

W2

Summarizes everything that happened to your income in the year

I-9

A documentation you fill to work showing that you are a legal citizen

Refund vs. Owning

A refund is when you withheld to much money that you get a refund of the money they don’t need, owning is when you pay to little in withholdings and have to pay more to the government

Different ways to file taxes

You can do it yourself, use a website, hire a someone to do your taxes

Medicade

Provides medical coverage to people that have the minimum annual income

Where are the three main places are tax dollars go

Healthcare, social security, national defense

How do insurance companies make money

They generate revenue by collecting premiums from policyholders and investing those funds, while managing risk to ensure a profitable financial outcome

Policyholder

A person who owns the insurance policy

Copay

A predetermined out of pocket cost that an insured individual pays for healthcare