Personal Financial Planning Guide, Ch 8

1
Personal Financial Planning Guide, Ch 8

• Health, Disability, Property and Auto Insurance

2
Health, Disability, Property and Auto Insurance

• Learning Goals
• Characteristics of various insurance types
• Insurance requirements

3
Health Insurance

• Two types of people dont need health insurance
• The very wealthy
• The indigent
• Everyone else should have some type of health
  insurance.
• Most health coverage is provided through
  employers.

4
Health Insurance

• Types of health care coverage
• Fee-for-service (BCBS, for example)
• Health maintenance organizations (HMOs)
• Preferred provider organizations (PPOs)

5
Health Insurance

• Fee-for-service health insurance policies differ
  in
• What is covered (vision, dental, etc.)
• Deductibles
• Co-payments
• Stop-loss amount
• Maximum coverage

6
Health Insurance

• Health savings accounts allow medical expenses to
  be paid out of pre-tax income.
• Disadvantages
• Must commit the year before
• Use it or lose it

7
HMOs PPOs

• HMOs require you to get your medical care from
  the HMO clinic.
• PPOs are in between traditional health insurance
  and an HMO you receive a list of preferred
  providers to choose from

8
Disability Insurance

• Disability insurance provides income if you are
  unable to work.
• Considerations
• Definition of disability
• Waiting period
• Benefit period
• Income provided

9
Property/Casualty Insurance

• Homeowners and renters insurance insures
• your personal property
• against liability and medical payments

10
Property/Casualty Insurance

• If you rent, you need renters insurance if
• You have personal possessions you cannot afford
  to replace
• You have assets you cannot afford to lose if sued

11
Property/Casualty Insurance

• Property/Casualty insurance differs in
• Deductibles
• Breadth of coverage
• Amount of coverage

12
Auto Insurance

• Types of auto insurance
• Liability
• Comprehensive collision
• AZ state law requires only liability insurance.
  Liability insurance pays you nothing if your car
  is stolen or destroyed.

13
Auto Insurance

• You need comprehensive collision insurance on
  your car, unless
• It has no value
• You can easily afford to replace it