COA 4131 1st Edition Lecture 18 Outline of Last Lecture I Liability and Auto Insurance II Costs of Auto Insurance III Health Care Costs IV Health Care Coverage V Providers Three Main Choices VI Long term Care Insurance Outline of Current Lecture VII Review of Health Care VIII Life Insurance Defined IX How does Life Insurance Work Current Lecture A Review of Health Care a Accidental death and dismemberment is a separate kind of insurance i You say exactly what might happen to you 1 Speech problems Psoriasis lose a limb 2 Something runs in your family and is kind of odd 3 Don t really need it b Better off with general insurance versus specified one unless you have an odd atrisk job or odd family history some kind of disease c Do not want to over insure d COBRA i Law that was passed that allows a person to extend their health insurance after the person loses their job ii Protects against life events such as job loss or divorce e Confidentiality statement i Sign a contract saying you will not go to work for competitor for 6 months to 1 year ii Will not reveal certain details about the company iii Helpful to those majoring in retail f Different departments of insurance are there that you can call if you ever have a question or concern and someone will talk to you and explain it to you i They are there to help you and take care of you B Life Insurance Defined a Life Insurance i Really about the survivors of the deceased 1 Setting up their financial burdens and other important things 2 The people who are left behind can keep up life style and be okay financially 3 70 of American adults have life insurance 4 Can get it on own or through employer a Can be free from employer b About 5 000 a year if you buy it on your own 5 New life insurance is being bought by people 25 44 years old a Spouse and kids during this age 6 About 25 of life insurance policies are not collected a People bought it and did not know or forgot they had it b People who move a lot are unorganized ii Contract between insurance company or insurer 1 Sum to be paid when policy holder passes on 2 Insurance company is taking a risk on you depending on your age lifestyle and occupation iii Face amount 1 Stated sum of money on a policy iv Beneficiary 1 Recipient of policy proceeds if insured dies 2 Can be a business or business partner a Keep the business going 3 Can write it for husband wife and future children if you do not have children yet 4 Contingent beneficiary a The person does not want the money b The person could hate them got in a fight or have issues with them 5 Married couple who gets in a car accident has to prove who died first b Purpose i Cash value 1 Accumulated savings that provide a refund to the owner of the policy if the contract is terminated prior to death ii Whole Life Insurance 1 Has a cash value 2 Accumulate life earnings and can take some money out before you even die if you really need the money C How Does Life Insurance Work a Men in their 20 s are the healthiest people in the United States b Pooling of risk c Preferred risks i 80 years old and loves sky diving 1 Not a preferred risk 2 If they try to buy life insurance either won t insure them or will be extremely expensive d Underwriting process i Takes about 2 8 weeks before insurance kicks in ii Lapsed Policies 1 Termination of a policy because of non payment 2 If you haven t been paying the past few months the policy can be put on hold and they can potential drop you iii Grace Periods 1 Time allowed for overdue payment without penalty 2 Check for grace periods before lapsed
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