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Definition
an uncertainty with respect to economic loss
possibility of experiencing harm, suffering, danger or loss |
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| insurers and government programs negotiate discounts (why hospitals charge higher prices for non-insured) |
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| Includes: Hospital, surgical and physicians expense |
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| covers hospitalization expenses (room fees, nursing fees, drug fees) |
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| covers only direct cost of surgery |
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| physician expense insurance |
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| cover office fees, lab fees, X-ray fees |
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| cover medical costs beyond the basic plan; usually require co-payments and deductibles |
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| limits the total out of pocket expenses incurred by the insured to a specific dollar amount |
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| total amount the insurance company will pay over the life of a policy |
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| eye exams, glasses, dental work, dentures, etc...expensive unless provided with and employer's plan |
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| Dread Disease and Accident Insurance |
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| covers only specific illness or accidents; set dollar amount for reimbursement |
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Definition
| fee-for-service/indemnity plans and managed health care (HMOs and PPOs) |
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| Fee-for-Service (Traditional Indemnity Plans) |
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| greatest choices; coinsurance; copayments/deductibles; inexpensive BUT require paperwork |
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| 2 types: HMOs and PPOs; pays for and provides health care to policy holders; limited choices; monthly premium and copayment |
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| Health Maintenance Organizations (HMOs) |
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Definition
most popular
system of doctors and hospitals for flat fee
3 types- individual practice, group, and point-of-service |
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| Preferred Provider Organizations (PPOs) |
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Definition
cross between fee for service and HMO
group of doctors work at reduced cost
additional fees for a nonmember doctor |
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| expensive tailor-made policy |
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| government sponsored health care plans |
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Definition
| workers comp, Medicare, Medicaid |
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for workers injured on the job
work-related accidents
coverage determined by STATE |
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Definition
for disabled and over 65
cost covered through social security
divided into A and B |
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Definition
for lower income, blind, or aged
can be used to offset premiums, etc...incurred with Medicare |
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| Flexible Spending Account |
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Definition
funded with pre-tax $
pays unreimbursed medical expenses
very flexible--some expenses not eligible for coverage
use it or lose it! |
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| provides income in event of long-term illness or injury |
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| daily dollar benefit for cost of long-term-care |
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Definition
1. rational people try to reduce/avoid risk
2. risk is subjective- individuals define the level |
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| a person weighing uncertainty |
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avoidance
reduction
assumption
insurance |
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| insurance; individuals share their financial risk |
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| month cost you pay for your insurance policy |
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| person who's life is covered by insurance |
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| the business that pays for the owns the policy (State Farm) |
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Definition
| recipient of benefit upon the death of uninsured (usually the family) |
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| earnings multiple approach |
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Definition
| adjust salary down to compensate for the reduction in household expenses |
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Definition
determine total need
subtract current insurance
determine the amount of additional coverage you need |
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Term
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Definition
death benefit coverage for a specific term of time (usually annually)
only valid if they die DURING coverage (not permanent)
least expensive |
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Term
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Definition
provides death benefit and opp to accumulate savings
permanent- NO time limit
types: whole life, universal life, and variable life |
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Term
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Definition
permanent protection
fixed premium, death benefit
fixed cash value
LESS death protection for SAME price as term insurance |
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Definition
permanent protection
flexible premiums
flexible death benefits |
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Term
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Definition
permanent protection; returns are earned on a tax-deferred basis
fixed OR flexible premium |
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| one time payout upon death |
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| periodic payments of the interest earned by the principle |
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| installment payment settlement |
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Definition
| periodic payments, normally for a fixed period, of both principal and interest |
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Definition
| periodic payments that continue for life of beneficiary |
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