INSURANCE WHAT IS IT

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INSURANCEWHAT IS IT? WHO NEEDS IT?
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Financial Risks

• 3 Main Risks
• Property Risks
• Property damaged or destroyed
• Personal Risks
• Illness, injury, disability
• Liability Risks
• Your at fault for someone elses injury
• How many of us have enough savings to survive
  these risks?

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Insurance

• - purchased protection that guarantees to pay
  you in the event of certain specified losses
• Good
• Transferring Risk Limiting your personal
  financial risk

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Two Principles

• Indemnity restoring the insured person to the
  financial position they were in before the loss
  occurred
• How is that calculated?
• Insurable Interest you own or are responsible
  for the financial responsibility in the life or
  property being insured.
• Life, Home, Car,

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Insurance Terms

• Policy
• Written agreement between the policy holder,
  buyer of insurance, and insurance company
• Exclusions
• Specific risks not covered in a policy
• Normal wear and tear
• Intentional damage
• Misuse or inappropriate use
• Endorsements (Rider)
• Add or Takeaway coverage
• Why would someone want to do this?

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Insurance Terms

• Premium
• Payment made to insurance company
• Monthly, Semi-Annually, Annually, etc
• Claim
• Request for payment from an insured loss
• Deductible
• Set amount insured person must pay per loss
  before the insurer will pay benefits.
• Your portion of the loss
• Co-Insurance
• Share costs of claim after deductible is met.

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Life Insurance

• What is it?
• Insuring the liabilities if someone's life was to
  end
• Replaces income
• Supports family
• Pays off house
• Funeral expenses
• Daycare
• DEBTS
• Other necessary services
• No body likes to talk about this!

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Types of Life Insurance

• Term Insurance
• Renting Insurance
• Insurance for a certain time period and certain
  amount of money
• No investment element
• Typically the lowest cost per coverage amount
• Renewable Term
• Renewable policy
• Level Term
• Premiums remain same over time period
• Decreasing Term
• Coverage decreases, premiums same
• Convertible
• Change to permanent policy later

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Types of Life Insurance

• Permanent Insurance
• Cash Value Both insurance and investment
• Whole Life
• Straight Life, Ordinary Life Insurance for your
  entire life
• Limited Payment Life
• Pay premiums for a certain age, stop, but
  coverage continues
• Universal Life
• Guaranteed rate of return on investment
• May change face value
• Variable Life
• term, remaining cash value

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Which one is best!

• Toughest question!!!
• if you have a lot then you have many
  options
• Needs, goals, what you want your beneficiaries to
  have
• Which type is probably cheapest per dollar of
  coverage?

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Policy Features

• Premiums
• Payment for insurance coverage
• Dividends
• Interest money paid to policy holders
• Not guaranteed
• Beneficiary
• Who receives the benefit of the policy
• Maybe more than one person or group
• Must keep this updated oops!
• Benefits
• The actual receipt of the death benefit

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Factors Affecting Cost

• Insureds Health
• Family Health History
• Occupation or Hobbies
• Gender
• Age of Insured