Transcript Taxpayer Responsibilities

What are some things that
can go wrong?
You can’t work
 Divorce/separation
 Laid off / fired
 Incompetence
 Do something wrong
 Sickness Injury
 Company closes
 Skills obsolete
Other issues
 Fire / flood
 Family illness
 Tree falls on your
house
 Car accident
 Robbery
 Sick pet
 Freak accident
How can you protect yourself
and your loved ones?
Insurance will protect you from bankruptcy
when unexpected things happen.
Insurance
• Renters / Homeowner’s
Insurance
• Auto insurance
• Disability
• Health insurance
• Life insurance
• Living wills
Terms to Know
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Beneficiary
Liability
Tort
Rider
Deductible
Insurance agent / agency
Insurance Bundling
Premium
Appraisal
Replacement cost
Renter’s Insurance
Covers the cost of your “stuff” or “personal property”
when you rent the place your life.
 Clothes
 Furniture
 Food
 Make up
 Musical instruments
 Sports equipment
 Books / textbooks
May need more coverage for flood or
earthquake
More at esurance and NSSI
Homeowner’s Insurance
Covered for damage to your home and damage to your
property.
 Make sure you have the guaranteed replacement cost,
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not the actual cash value (ACV)
Dwelling
Contents
Other structures (sheds, pool or spa, garage, etc.)
Loss of Use coverage pays for you to live somewhere
else until your home is livable.
Liability – protects you from lawsuits against
your property in the event someone sues you
 Umbrella liability covers home and motor
vehicles for $1 million or more
Homeowner’s Insurance
Additional coverage.
Each policy has a maximum amount it will cover for certain things
such as clothes, and musical instruments. You can add a rider for
additional coverage if your replacement costs exceed that amount.
 Ex: Your policy may cover up to $500 for musical
instruments, and the total replacement value of your guitars
is $2000.
Schedule your valuables for specific coverage
 Jewelry, fine art, fire arms, etc.
 Get appraisals
 Schedule each items separately according to the
appraisal amount
Things that are not covered by most policies
 Floods, earthquakes, sewer backups
Disability Insurance
Provides some income for you when you are sick or
inured and cannot work.
 Some states require you to have disability insurance.
The premium is deducted as a withholding tax from
your paycheck.
 Elimination or Waiting Period – how much time
passes between the onset of the disability and when
you start collecting (30 days, 90 days)
 Benefit period – maximum during of
payment while your are disabled (2 or 5 years)
 Total vs. partial disability
Health Insurance
Government Insurance
 Medicare (seniors)
 Medicaid (welfare)
Private Insurance
 Individual plans
 Group plans (through work or another organization)
o Cobra plans allow you to keep your group insurance
for up to 18 months after your leave the group
but you have to pay the premium.
Types of Health Insurance
1. Indemnity plan (fee-for-service)
• Usually the insurance pays 80%, you pay 20% co-
insurance plus a yearly deductible ($250 – 2500).
2. Preferred Provider Organization (PPO)
• Negotiates discounts with doctors who are in-network.
• You make a co-payment for each doctor visit plus a co-
insurance and pay a yearly deductible
• Out-of-network doctor visits will cost you more.
3. Health Maintenance Organization (HMO)
• Not health insurance but health care / managed
care
• Most routine procedures covered with low
co-pays
• Only covers in-contract doctors and
specialists
Alternatives to Health
Insurance
1.
Consumer driven health plans
 Higher deductibles – lower premiums
2. Health savings accounts
 Allow you to save money to meet future healthcare
expenses
3. Shared medical costs groups
 Individuals contribute to help others with their
medical expenses on the expectation that their
expenses will be covered later on.
Auto Insurance
Types of coverage
1. Liability Coverage pays for damage you or someone
driving your car cause to other people or their property
(state mandated insurance)
• Bodily injury liability
• Property damage liability
2. Medical payments coverage
3. Personal Injury Protection (PIP)
4. Uninsured and Underinsured Motorist Coverage
5. Collision Insurance Coverage
Auto Insurance
Types of coverage
6. Comprehensive Insurance Coverage (fire, theft,
vandalism, and other losses not covered by
collision insurance.
7. Towing and Emergency Road Service
8. Rental Reimbursement
Full and Partial Tort
 Full tort means there is no limit on your right to
sue someone else if you are in an accident
 Partial tort limits your right to use
Full vs. Limited Tort
Life Insurance
Benefits those you leave behind
 How much?
 Enough to cover burial expenses, medical expenses,
living expenses for beneficiaries
 Future expenses, i.e. college for your children
 Term insurance – last a specific amount of time
 Shorter amount of time means lower premium
 Payment amount will be assessed at renewal
 Whole life (permanent) insurance – lasts for your
lifetime
 Sometimes can be borrowed against
 Costs more than term
 Some Companies have policies on their
employees
Wills and Living Wills
A will is written to allocate your assets to the
those you specify in case of your demise.
A living will protects your wishes if you become
incapacitated and cannot speak for yourself.
 Example: Do not resuscitate (DNR)
 Can make your loved ones feel less guilty if they
have to make a tough decision about your care.
 You may also want a “health care power of
attorney” to grant someone else the right to
speak for you if you cannot speak for
yourself.
Today’s Assignment
Go back up to Slide 4, Terms to Know. On a piece of
paper, write the definition of each term. Write it in your
OWN WORDS so that you know you know what is
means.
Please hand it in before you leave today..
Other kinds of insurance
0 Vacation insurance
0 Pet insurance