Lesson 2: PROTECTING YOUR WEALTH Lesson Objectives: At the end of this lesson, you will be able to & Explain the different ways of protecting your wealth 3 Differentiate the different types of insurances Discussion: after working hard to create personal wealth, you need to protect it. People acquire insurance to protect themselves from major financial loss. Insurance is simply @ promise of reimbursement for a loss in return for a premium paid. When shopping for insurance products, consumers should mateh their needs with what the product offers and seek out the best deal. A solid credit history Learning Module on The Entrepreneurial Mind is also important because insurers use credit information to price some types of insurance policies. Property Insurance Property Insurance is a form of insurance which protects 2 building and its contents. Auto Insurance State laws require that all motor vehicles have lability insurance to cover injury to ether people or damage to their property. If you have a loan on your vehicle, your lender will also require physical damage coverage on it. Home Insurance If you are renting your home or apartment, you should purchase renters or contents Insurance to cover your possessions against loss from fire or theft Health Insurance Health Insurance is a type of insurance coverage that covers the cost of an insured individual's medical and surgical expenses. Depending on the type of health insurance coverage, either the insured pays cost out-ofpashet and is then reimbursed, or the insurer makes payments directly to the provider. Medical Insurance No one wants to worry about a trip to the emergency room wiping out everything they have saved toward their financial goals. Many people cutback on their medications trying to keep medical costs low ~a practice that will likely lead to worsening health and higher casts. Many Households have significant levels of debt because they did nat have medical insurance or because they did not have savings to pay expenses that were not covered by their health plan. Late payments and defaults on medical debt may be reported on credit reports and affect 2 person's credit score Disability Insurance Disability insurance, sometimes called ‘Health and Accident Coverage’, is 2 policy designed to pay out a percentage of the holder's current wages if he or she becomes unable to work. The two main reasons for claiming disability insurance benefits are accidents (whether on the job or not) and debilitating illnesses. Workers covered under disability insurance policies must prove that they cannot perform the majority of their present duties to qualify for total disability status. Life insurance Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy. Essentally, a life insurance policy 's a contract between the named insured and the insurance company wherein the insurance company agrees to pay an Learning Module on The Entrepreneurial Mindagreed upon sum of money to the insured'’s named beneficiary, so long as the insured’s premiums are paid current. Personal accident insurance may also offer a cushion to families if member dies or is seriously injured in an accident. This kind of insurance is often available through your employer or other provider at relatively low cost. Life insurance is available in a number of different forms from several companies. Each company has financial representatives who help customers select the best insurance products for their needs. Some of the typical forms of life insurance Application: If you were to apply for and avail an insurance coverage, which type would be your top. priority—property, home, auto, medical or life? Explain your answer. Summary of the Lessor Property insurance is a form of insurance which protects a building and its contents. There are a number of types of this insurance available on the market, and when purchasing this insurance product, people should definitely consult an insurance agent to confirm that they buy a product which is suitable for their needs. Health insurance is a type of insurance coverage that covers the cost of an insured individual's medical and surgical expenses. Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy.