Insurance Basics
What is insurance?
Protection against financial loss
What does health insurance help pay for?
Medical bills and health care costs
What does liability insurance cover?
Damage or injury you cause to others.
You pay $200/month for your health insurance premiums. How much do you pay in premiums for the year?
$200 × 12 = $2,400
What is a dependent?
A person (like a child or spouse) who can be covered under someone else’s insurance plan.
What is coinsurance?
The percentage of costs you pay after the deductible is met.
What does collision insurance cover?
Damage to your car from a crash.
You have a $30 copay for visits to the doctor. You have a doctors appointment that costs $200, how much do you know you have to pay no matter what?
$30, no matter what you always have to pay your copay
What is a premium?
The amount you pay to have access to insurance, usually monthly or yearly (like a subscription)
What is a copay?
A fixed amount you pay for a medical visit or prescription.
What does comprehensive insurance cover?
Damage not from a crash, like theft or fire.
Your deductible is $1,000. You have a hospital bill for $800. How much does your insurance pay?
$0, you pay the entire amount since your deductible hasn't been met yet
What is a deductible?
The amount you pay out of pocket before your insurance starts paying
What is an out-of-pocket maximum
The most you’ll pay in a year before insurance covers 100%
What could happen if you drive without insurance?
You could be fined, lose your license, or pay all damages yourself.
You have already met your $500 deductible, then have a $200 medical bill. How much do you pay if your coinsurance is 20%?
You pay 20% of $200 = $40
What is the relationship between insurance premiums and deductibles? (The higher/lower the premium, the higher/lower the deductible)
The higher the insurance premium, the lower the deductible
The lower the insurance premium, the high the deductible
If your deductible is $1,000 and your medical bill is $2,500, how much do you pay before insurance helps?
You pay the first $1,000 (your deductible), then insurance helps pay the rest.
What are 3 factors can affect your car insurance cost?
Age, driving record, car type, location, credit score, etc.
Your deductible is $1,000 and your coinsurance is 20%. You have a $3,000 hospital bill. How much do you pay total?
You pay $1,000 (deductible) + 20% of $2,000 = $1,400 total