Insurance & Taxes

Risk

the possibility of loss.

Risk Management

Protecting your assets from the possibility of loss

Insurance

Arrangement between insured & insurer to protect the individual against risk

Insurer

Insurance company

Insured

Individual covered

Insurance Policy

Is a contract detailing the terms and conditions of insurance coverage.

Liability Insurance

Protects individuals from the risk of being held legally liable for the injuries of others.

Premium

Paid amount for coverage

Underwriter

A person that analyzes the risk of insuring a particular asset.

Claim

A request for payment for a loss based on the terms of the policy.

Claims Adjuster

A person that investigates your claim.

Indemnity

To return you to the condition you were prior to the loss

Automobile Insurance

Covers loss due to an accident involving vehicles.

Homeowner's Insurance

Covers loss/damage to property, such as damage from fire, theft, weather, and accidents. It also covers injury to someone else on your property.

Renter's Insurance

Covers loss of personal property inside property you are renting

Floater

Covers specific items not covered under your policy. Jewelry, guns, electronic equipment.

Life Insurance

Protects against loss of income that would result if the insured person dies.

Term Life Insurance

Coverage for a specified amount of time, such as 30-yers, for a fairly low premium.

Whole Life Insurance

Covers insured for their entire life and not just for a specified term. It can have a savings or investment component, with a cash value.

Health Insurance

Covers the cost of medical care based on needs, circumstances, and preferences.

Deductible

Specific amount you are expected to pay for services before your insurance begins paying

Long-Term Care Insurance

Covers at-home, assisted living, and nursing home care. Typically for the elderly.

Disability Insurance

Replaces a portion of your income if you are no longer able to work because of an illness or injury. A typical plan may offer up to 60% of your gross salary for a specific number of years.

Beneficiary

Recipient of any policy proceeds.

Contract

An enforceable agreement or promise between at least two parties about something of value.

Insurable Interest

Loss/damage to the insured would cause the policy holder to suffer a personal loss.

Actuary

Individual who uses demographics, accident data & geographical info. to estimate the cost of risk.

Liability Insurance

Coverage protects you if you are at fault for an accident and you hurt someone or someone's property.

Bodily Injury

Coverage paid to a person for bodily injury

Property Damage

Coverage paid for all property damage liability losses from an accident

Collision Insurance

Pays for repairs to your car regardless of who was at fault.

Comprehensive Insurance

Handles physical damage not covered by collision insurance. Theft, vandalism, flood, fire, hail, etc. Has a deductible.

Personal Injury Protection

Covers medical payments for you & your passengers, regardless of who is at fault in an accident.

Uninsured/underinsured Motorist Insurance

Protects you, your passengers, and your car in case of an accident with a driver who has no or insufficient insurance, or who leaves the scene of the accident.

Towing/Rental Car Coverage

Towing and rental car coverage pays for the towing costs if your car is non-operational, and sometimes will cover all or part of the cost of a rental car.

Coverage Limits

Maximum dollar amount the insurance company will pay

Coverage Costs

The cost of each type of coverage.

Deductible Amounts

Your responsibility towards the amount needed to be paid.

Exclusions

What events are not covered.

Conditions

May include cancellation provisions or procedures for filing a claim.

Policy Quote

Estimate of premium you would pay for specific coverage.

W-4

Withholding Allowance Certificate used to help calculate your payroll deduction

Withholding Allowance

Determines how much tax will be withheld from each check.

Internal Revenue Service (IRS)

US Federal Government agency that collects taxes and enforces tax law.

Tax Returns

Tax form or forms used to report income and file income taxes with IRS

Form W-2

Employee's withholding allowance certificate. Reports annual wages & taxes paid.

Form 1099-INT

Tax form showing your earned interest

E-File

Electronic filing of tax return. Easiest, fastest, & safest way to submit individual tax returns.

Tax Audit

Detailed examination of your tax return by the IRS.

Tax Evasion

Failure to pay legally due taxes.

Tax Avoidance

Legal means of decreasing your tax bill.

Tax Credit

Dollar for dollar reduction in tax. (1st time home buyers credit, teacher's tax credit)

Tax Deduction

Reduces your taxable income

Standard Deduction

Amount of money the IRS says is not taxable

Itemized Deductions

Specific expenses that you deduct from your gross income—could be more than the standard deduction. If it is less than the standard deduction, don't do it!

Income Taxes

Tax on earnings (progressive—pay a higher percentage the more you make)

FICA

Includes two separate taxes: Fed OASDI/EE or Social Security and Fed MED/EE or Medicare

Social Security

Nation's retirement program, provides retirement income for elderly & pays disability benefits

Medicare

Nation's health care program for elderly/disabled, provides medical insurance to those who qualify

Sales Tax

Tax on sale of items

Excise Tax

applied to select group of products like gas alcohol & tobacco (sin tax)

Property Tax

Missouri breaks property tax into Personal Property and Real Estate.

Tax levied on property based on value of property, if value of property goes up, so does tax

Estate Tax

A federal tax collected on the value of a person's property at the time of his or her death

Inheritance Tax

A state tax collected on the property left by a person to his or her heir(s) in a will. Before you can claim your inheritance, you must pay a tax

Gift Tax

A federal tax collected on money or property valued at more than $14,000 (2016 law) given by one person to another in a single year.

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