Life Insurance

Protecting Your Family

• People provide for their future by saving money and wisely investing their funds.

• Just as vehicle insurance and property insurance protect against losses to property, life insurance and health insurance protect people.

Types of Life Insurance

• Life insurance is insurance that is paid to a person or people designated to receive the funds when the insured person dies.

  • Buying life insurance can help you protect the people who depend upon you from financial losses caused by your death.

• Upon the policyholder’s death, the insurance company pays the survivors the value of a life insurance policy, or the proceeds.

• A beneficiary, who is a survivor, is someone who receives part or all of the proceeds.

• Cash-value insurance, or permanent insurance, provides both savings and death benefits.

• With whole life insurance, a premium that stays the same is paid throughout the policyholder’s lifetime.

• With universal life insurance, a policyholder has more flexibility in premium payments and benefits once the policy has built cash value.

• With variable life insurance, the cash-value part of the premium is used for investments such as stocks, bonds, and mutual funds, rather than savings.

• Term insurance covers a person for a specific period of time. The length of the term might be five, 10, or 20 years.

• Workers or their companies usually pay less for a group policy than for individual policies.

Costs of Life Insurance

• As with any type of insurance, the amount of the premium on a life insurance policy depends on the type of policy and the amount of coverage.

• Term insurance costs less than cash-value insurance

• Factors such as the policyholder’s age, health, and occupation also affect the cost of the premium.

Health Insurance

Protecting Your Health

• Few people have enough savings to pay for medical costs on their own.

• Health insurance provides protection against the costs of illness and accidents

Paying for Health-Care Costs

• Many health insurance policies have coinsurance, a percentage of medical expenses that a policyholder must pay beyond the deductible.

• Many policies also require a copayment, or a fee paid each time a service is used.

• Some services, such as dental, vision, or mental health care, might not be covered by a health insurance policy.

• Many policies also will not cover a pre-existing condition, a serious health condition diagnosed before a person obtained health insurance.

• Major medical insurance, sometimes called catastrophic insurance, is the most important coverage for a serious illness or accident.

  • Major medical insurance is intended to cover health-care costs not covered by other types of insurance.

• Hospital expense insurance pays for hospital care for a given period of time.

• Surgical expense insurance pays part of a surgeon’s fee for an operation.

• Medical expense insurance covers the costs of a doctor’s care not involving surgery

• A group health insurance plan is the least expensive form of health insurance for most people.

• A health maintenance organization (HMO) provides health care at its own health center for a fixed fee per month.

• A preferred provider organization (PPO) is a group of doctors and hospitals that agree to provide specified medical services to members at pre arranged fees.

• Medicare is the U.S. government’s major health insurance program for the elderly.

• Medicaid is a federally and state-funded health-care plan for people who are unable to pay for insurance or health care.