Subject: Personal Finance Grade: 12th Mr. Holmes Unit Lesson Layer Duration "Take Charge of Your TYPES OF INSURANCE Applied (do) 2/4/13-2/15/13

Transcription

1 Subject: Personal Finance Grade: 12th Mr. Holmes Unit Lesson Layer Duration "Take Charge of Your TYPES OF INSURANCE Applied (do) 2/4/13-2/15/13 Finances" Advanced Level Essential Questions What do you think about, prove, apply, what if, what would you do if, evaluate, how would this be different if, suggest? 1. Explain the procedure for analyzing risks covered by each type of insurance? 2. Explain the difference between sources which provide insurance? Objectives/Standards Standards: 1. PF 5. 1 Critique how risk management protects against financial loss. 2. PF 5. 2 Check how state and federal laws and regulations protect consumers. Objectives: 1. Explain the relationship between risk and insurance 2. Identify how insurance is a form of income to help cover financial losses when unexpected events occur 3. Define common insurance terms 4. Evaluate the sources which provide insurance 5. Analyze the risks covered by each type of insurance Key Terms 1. Automobile insurance 2. Beneficiary 3. Claim 4. Co-insurance 5. Coverage 6. Deductible 7. Dependent 8. Disability insurance 9. Emergency benefits 10. Health insurance 11. Homeowners insurance 12. Household production 13. In-kind income 14. Insurance 15. Liability insurance 16. Life insurance 17. Long-term care insurance 18. Moral hazard 19. Policy 20. Policyholder 21. Premium 22. Property insurance 23. Renters insurance 24. Risk 25.

2 Materials 1. Insurance Key Terms A1 2. Insurance Investigation A2 3. Damon Goes to the Hospital Reflection A3 4. Types of Insurance A4 5. Insurance Investigation Rubric B1 6. Types of Insurance Vocabulary List E1 7. Damon Goes to The Hospital E2 8. Types of Insurance Activity Cards H1 9. Insurance Event Activity Cards H2 10. Spoons Activity Instructions J1 11. Spoons Activity Answer Key K1 12. Types of Insurance Note Taking Guide L1 Differentiation Reduced assignments Anticipatory Set 1. Depending upon the vocabulary activity used as well as the needs of participants, the vocabulary activity may be conducted before, during and/or after instruction. 2. Approximate time: 15 minutes prior to instruction and 15 minutes at the end of instruction a. Before instruction: i. Provide each participant with the Insurance Key Terms A2. ii. Prior to lesson instruction, have participants write the definition of each vocabulary word in their own words. b. After instruction: i. After the lesson is complete, have participants apply what they have learned by writing a sentence using each word in the row. The sentence should not be the definition repeated; it should summarize the words indicating how they impact one another or may be applied to a real life situation. Option 1: Risk, Responsibility, and Reality video clip Approximate time: 5 minutes c. Show the Risk, Responsibility, and Reality video clip. i. Refer to the resources section for the website address to the video clip. After following this hyper link, scroll down to the link that is titled Risk, Responsibility, and Realty Video Clip. It is located under the materials section. This is a 1 minute and 19 second video about insurance. ii. Conduct a class discussion regarding the video clip. Potential discussion questions include: 1. What is insurance? 2. Why is insurance important? a. Answers may include: i. To prepare for emergencies ii. To protect against risk b. How does insurance benefit a financial plan? i. Decreases an individual's financial responsibility after an emergency. Option 2: Guest Speaker Approximate time: 45 minutes

3 a. Invite a guest speaker to discuss insurance with participants. b. Prepare the guest speaker with talking points to focus upon during the presentation. i. Real-life scenarios about when insurance prevented a family from financial distress. ii. What common insurance terms mean. iii. The importance of taking advantage of employer provided insurance benefits. iv. Features to look for in typical insurance policies. v. Tips for selecting an insurance agent. vi. Why they choose to become an insurance agent and the career opportunities it provides. c. Prepare participants by having them complete either Guest Speaker Form 1 or Guest Speaker Form 2 in the Guest Speaker Active Learning Tool i. Refer to the Guest Speaker Active Learning Tool for further tips on guest speakers as well. Procedure Approximate time: 45 minutes 1. Split participants into groups of 3-4 to complete discussion questions during facilitation. 2. Optional: Pass out one Types of Insurance Note Taking Guide Ll to each participant. Part 1: Receiving Money from Insurance 3. Present the Types of Insurance PowerPoint G1. a. Slide 2: Why is it important to have insurance? i. "Loss" may be financial. ii. Emergency savings is typically used for smaller losses, whereas insurance typically covers loss from larger events such as an automobile accident. iii. In their groups, have participants brainstorm events which may result in a loss 1. Getting sick, automobile accident, losing a job, death, a fire, etc. b. Slide 3: Insurance Policy i. When shopping around for different policies, individuals should research multiple insurance companies and compare the coverage offered for each. ii. In small groups, have participants discuss why insurance policies are considered a form of financial security. 1. Insurance is a form of financial security, because it reduces the financial loss an individual encounters when an event occurs. In many cases, the cost of events such as an automobile accident or medical care is much higher than an individual/family can afford without insurance as a form of income. c. Slide 4: An Illustration of How Insurance Works i. The amount an individual pays for an insurance policy is often much less than the benefit they receive if a loss occurs because the insurance company has pooled their resources with others. ii. Insurance shifts the risk of big loss from the individual to the insurance company. d. Slide 5: The Benefits of Insurance i. Payments received from an insurance policy can far exceed the premiums paid. ii. Insurance provides financial security. iii. There are many types of insurance offered by insurance organizations to protect individuals against loss. Those listed are a few of the most common. iv. Homeowners, renters and automobile insurance are a part of property and

4 liability insurance. v. In small groups, discuss why the best outcome is to have insurance but never collect on it. 1. Because this means nothing has gone wrong. Part 2: The Insurance Process e. Slide 6: The Insurance Process i. Not all insurance companies pay claims the first time they are submitted by a policyholder. Policyholders must be aware of the coverage identified within their policy, keep detailed records, and be diligent about seeking reimbursement when applicable. f. Slide 7: Louise's Example i. Deductible and co-insurance amounts will vary among policies. ii. Not all types of insurance require deductibles and/or co-insurance. iii. Even with insurance, individuals may still incur costs. However, in this example, Louise paid $1,400 rather than the entire $5,000 bill. iv. In small groups, have participants speculate what Louise's options would be if she did not have medical insurance. 1. Responses may include paying for the medical bill from personal savings or needing to borrow money. g. Slide 8: You Do The Math! i. Have participants complete the math to determine how much Carlos and the insurance company would pay in this example. ii. This example identifies how co-insurance is not required by all policies. h. Slide 9: Which Insurance Policy Would You Choose? i. Have participants discuss within their groups the pros and cons of each insurance policy. 1. Although individuals may want lower premiums, they need to be sure they can afford the out-of-pocket expenses including the deductible and co-insurance amounts if a loss occurs and they need to make a claim. Individuals should also consider their individual health, including how often they visit the doctor. 2. The pros of Janet's current policy is that the deductible is low. The con is that the premium is higher than the new policy and she has to pay 20% co-insurance. 3. The pros of the new policy is that the premium is lower and it has a 0% co-pay. This means that she knows exactly how much she will have to payout of pocket before insurance covers any losses. The con is that the $2000 deductible is high, and much higher than her current $200 deductible. 4. Which insurance policy is chosen depends on the individual person. Some prefer a higher deductible, no co-insurance, and a lower premium (the new policy), while others prefer the lower deductible of the current policy and would be willing to pay the extra $100 per month for the premium. i. Slide 10: Why Do Insurance Policies Include Deductibles and Co-Insurance? i. Dollars paid from an insurance policy are not intended to make a person better off than before the loss happened. Part 3: Sources of Insurance

5 j. Slide 11: Sources of Insurance i. Explain to participants that besides personally purchasing insurance from an insurance organization, insurance may also be provided by employers and the government. ii. Not all employers provide health, disability or life insurance. In these cases, an individual must acquire them separately. k. Slide 12: Employer Provided Insurance i. In small groups, have participants consider if they were offered two jobs with the same pay but one offered benefits, which job would be the best financial decision? 1. The job with benefits would most likely be the best financial decision, because benefits can provide 30% or more in in-kind income that is tax free. l. Slide 13: Government Programs i. Most government programs require individuals to be eligible to receive the benefits. Part 4: Types of Insurance m. Slide 14: Health Insurance i. Health insurance policies vary greatly in the coverage they provide. ii. Vision and dental care are not a part of all policies. iii. If dollars are limited to purchase insurance, it is recommended that health insurance be a priority. n. Slide 15: What if a Person Cannot Work or Live Independently? i. Disability policies vary in the type of disability covered as well as the amount paid and length of time. ii. Long-term care insurance is when an individual does not need hospitalization but cannot live independently. iii. In small groups, have participants consider why each type of insurance is important. 1. Accidents happen and individuals need a form of income to pay for basic expenses while they physically recover. 2. If an individual requires long-term care, the expenses are often extremely high. o. Slide 16: Property & Liability Insurance i. Property insurance is for the insured person whereas liability insurance is for injury or loss to others. p. Slide 17: Types of Property & Liability Insurance i. Individuals must purchase automobile, homeowners, and/or renters insurance policies separately. ii. Each insurance type has a variety of policies available with different coverage amounts. iii. If a person drives an automobile, automobile liability insurance is required by law. Automobile property insurance is not required by law. q. Slide 18: Life Insurance i. In small groups, discuss when it would be necessary to purchase life insurance. 1. Life insurance is most important when an individual has dependents (such as children) that rely upon that individual for money income and care.

6 ii. The value of household production such as child care, meal preparation, cleaning, etc. for overall well-being is quite high for families and should be considered when making policy amount decisions. r. Slide 19: In Review Part 5: What Covers This Risk Activity s. Slides 20-25: What Covers This Risk i. Provide each group of participants with one complete set of Types of Insurance Activity Cards H1. ii. When the event appears, have the group hold up the sign indicating the insurance type they believe would be used for that event. Spoons Activity Approximate time: 20 minutes or longer depending upon the number of rounds completed Participants will play the Spoons activity. Directions can be found on the Spoons Activity Instructions J1. Insurance Investigation Family Activity Approximate time: 15 minutes to introduce, 60 minutes outside of class to complete discussion and essay, 15 minutes upon activity conclusion for in-classroom discussion. Participants complete Insurance Investigation A2 which will be graded using the Insurance Investigation Rubric B1 by conducting a conversation with an adult regarding the topic of insurance. o Prepare participants for the activity by providing each with an Insurance Investigation A2, Insurance Investigation Rubric B1, and one Insurance Event Activity Cards H2. Have participants record their Insurance Event Activity Cards 1.lO.1.H2 in the space provided on the Insurance Investigation A2. Explain that they will conduct a discussion with an adult regarding the scenario provided. Discussion questions are provided. Remind participants that they should conduct a conversation with the adult, not hand the adult the questions to answer on their own. When the discussion is complete, they will write a reflective essay. o After the activity has been completed, use class time to discuss their interviews in small groups or as a class. Discussion questions may include: What is something new you learned about insurance from this individual? Were there any additional questions that you asked? What questions do you have as a result of the interview? Assessment The Importance of Insurance Scenario Approximate time: minutes Complete the Damon Goes to the Hospital scenario. Participants will need Damon Goes to the Hospital E2 and Damon Goes to the Hospital Scenario E2. The educator may wish to read the scenario out loud to the class to ensure everyone reads (hears) the entire story and all the details. The scenario may be completed using a variety of facilitation options: o In small groups - Divide participants into small groups and have them discuss questions. Then, as an entire class, have each group take turns reporting their discussion for each question. o Independently - Have participants complete the assignment independently at home. If

7 time allows, set aside fifteen minutes for the class to discuss their thoughts. Reinforcement Worksheet Approximate time: 20 minutes Complete Types of Insurance A1