Studied by 3 people
Looks like no one added any tags here yet for you.
Risk
The chance of loss from an event that cannot be entirely controlled
Emergency Savings
at least six months of expenses set aside to cover costs of unexpected expenses
Risk Management
How someone deal with the chance of a potential personal or financial loss
Risk Management options
Avoid, Reduce, Share/transfer, Accept
Risk Pooling
The spreading of financial risk evenly among a large number of contributors to the program
Insurable Interest
Any financial interest in life or property such that, if the life or property were lost or harmed, the insured would suffer financially.
Insurance Policy
A contract that outlines coverage plans and protects a person against financial loss or damage.
Coverage
Applies to the amount of protection you have through an insurance company in the event of a loss
Policy Holder
one who owns the insurance
Premium
Amount you pay monthly, quarterly, semiannually or annually to purchase different types of insurance
Benefits of Insurance
Payments received from an insurance policy can far exceed the premiums paid Provides financial security and peace of mind
Types of Insurance
-Automobile -Health -Life -Disability -Homeowner's/ Renter's
claim on the insurance
a demand for compensation as the result of loss, injury, or damage
Deductible
Amount you must pay before you begin receiving any benefits from your insurance company
Co-insurance
Requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid
Sources of Insurance
Individual, Employer, Government
Individual Insurances
Long term care, property and liability insurance
Employer Insurances
Health, Disability, and occasionally life insurance
Government Insurances
Special Programs for those who qualify and during catastrophe
Employee Benefits
Employers may offer employee benefits in the form of products or services that add extra value for employees beyond earned wages
Automobile Insurance
Provides payments for both liability and property insurance on a vehicle
25/50/25
-25,000 for per person injured -50,000 for entire accident -25,000 for property damages
Bodily Injury insurance
a type of liability insurance that covers drivers who are at fault for injuries to other people up to specified limits
Property Damage
Physical injury to, destruction of, or loss of use of tangible property.
Liability Insurance
insurance that provides protection from claims arising from injuries or damage to other people or property
Collision insurance
protection for damage to your car resulting from a collision with another car or object
comprehensive insurance
Damaged by anything other than a collision, insurance pays bill, covers theft, damage caused by fire, explosions, natural disasters, or riots.
Uninsured/Underinsured Motorists
Vehicle insurance that covers you and your family if you are involved in an accident with a driver who does not have insurance.
Auto Insurance's costs are based on
Type of coverage, driving record of insured, age, type of car, how often you drive and claim record
Life Insurance
insurance paid to named beneficiaries when the insured person dies
Beneficiary
one who benefits from something; a person who is left money or other property in a will or the like
Dependent
Someone who relies on someone else for income and care
Term Life Insurance
Insurance that provides financial protection from losses resulting from a death during a definite period, or term.
Whole Life Insurance
Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be.
Disability Insurance
A type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time.
Long-Term Care Insurance
Provides payment for extended nursing care due to accidents, illness, or old age
Health Insurance
Provides money to pay for health care for illness, injury, or, in some cases, preventive care
Dental Insurance
A plan that financially assists in the expense of treatment and care of dental disease and, in some cases, accidents to teeth NOT COVER COSMETICS
Vision Insurance
Provides coverage for optometry visits, contacts, glasses, and other eye-care needs.
5 General Areas of Health Coverage
Hospitalization, Surgical and Medical, Major-Medical, Dental and Vision, Mental Health
Medicare
A federal program of health insurance for persons 65 years of age and older
Medicaid
A federal and state assistance program that pays for health care services for people who cannot afford them.
Real Property
physical property such as land and buildings
Personal Property
possessions such as jewelry, furniture, and boats
Homeowners Insurance
Provides payment to cover liability losses as well as damage and loss of the home structure and its contents
Renters Insurance
a type of insurance that covers the loss of a tenant's personal property as a result of damage or theft
Earned Income
Money earned from working for pay
Unearned Income
Income received from sources other than employment
Alimony
payments made regularly to an ex-spouse after divorce
Paycheck Withholding
Money that your employer takes out of your check to pay for taxes
Types of paycheck withholding
Federal Income tax, state income tax, social security tax, medicare
FICA
Federal Insurance Contributions Act; tax levied on both employers and employees to pay for Social Security and medicare
Social Security
federal program of disability and retirement benefits that covers most working people
Gross Pay
the total amount of an employee's earnings before deductions are taken out
Net Pay
Amount of income left after taxes and deductions have been taken out.
Overtime Pay
Required for nonexempt workers under FLSA at 1.5 times the regular rate of pay for hours over 40 in a workweek
Annual Salary
the amount an employee gets paid once a year.
Sara worked 42 hours in one week, and makes $10 per hour. What is her gross pay for the week?
$400
IRS
(Internal Revenue Service) Governmental agency responsible for collecting federal taxes, issuing regulations, and enforcing tax laws
IRS Duties
Collect and process tax returns, ensure taxes are being paid, issue refunds for overpaid taxes, oversee retirement plans
Federal Income Tax
the taxes that the federal government imposes on personal income in order to provide services
What is Federal Income Tax used for?
Infrastructure, fund pension and benefits of government workers, housing and food to poor, emergency disaster relief
State Income Tax
A pay deduction required by law that supports the state government.
Separate Return
A return filed by a married individual reflecting his or her independent activity and tax liability for the year. The tax liability is based on the married filing separately rate schedule.
Tax Bracket
a specified interval of income to which a specific and unique marginal tax rate is applied
Progressive Tax System
a tax whose average tax rate increases as the taxpayer's income increases and decreases as the taxpayer's income decreases
Marginal Tax Rates
the tax rate on an additional dollar of income
Effective Tax Rates
the tax liability divided by the property's market value or sale price
Form 1040
The standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns.
Form W-4
A form that you fill out to provide the information your employer needs to determine the proper amount to withhold from your paycheck
Form W-2
A summary of the income you earned during the year and all amounts the employer withheld for taxes.
Form 1099 INT
a statement of the interest your bank paid on your savings for the year
What do you need to file your taxes?
Personal Information, W-2, 1099 INT, 1040 Tax form, Tax Table, Banking Information
Note 
Flashcard (41)