Insurance Essential Money Management Module Outline Essential Money Management has been designed to allow you to present specific personal finance topics in one week or less. Insurance contains the following resources: • This outline which explains in detail what is presented in each lesson and lists national standards that are met by the lessons. • 4 in depth, activity-based lessons that will teach your students how to understand the insurance they will be buying and using throughout their lives. • An assessment that can be used as a pre-test as well as a post-test to evaluate what your students have learned and to identify those areas that might require additional instruction. The Four Lessons Insurance includes the following 4 lessons. Each lesson contains 1 page of explanatory text, 1 or more reproducible student activities and a teacher’s key with answers, suggestions and step-by-step math solutions where appropriate. Lesson 1: Auto Insurance Your students will read: • An explanation of the various coverages in an auto insurance policy. • A list of the factors that determine the cost of an auto insurance policy. • Suggestions on how to control the cost of auto insurance. Student activities: • Students will read seven situations and decide which auto insurance coverages would apply in each situation. • Students will calculate the increase in a teen driver’s insurance premium based on a series of tickets and accidents. • Students will explain why they think teens should or should not be allowed to drive at age 16. • Students will use a list of terms to complete 18 factual statements about teen driving. Lesson 2: Health Insurance Your students will read: • An explanation of the current health insurance crisis and why acquiring health insurance is an important part of any job search. • A year-by-year list of the highlights of the 2010 Health Care Reform Act. Student activities: • Using a health insurance policy outline that is provided, students will calculate the amounts the insurance policy would pay toward several medical bills and how much the policyholder would have to pay. They will also answer questions related to the insurance policy outline. © 2011 C. W. Publications PAGE 1 Insurance Essential Money Management Module Outline Lesson 3: Property Insurance Your students will read: • An explanation of the coverages included in both a tenant’s and a homeowner’s insurance policy. • A list of the factors that determine the cost of a property insurance policy. Student activities: • Using an outline of Kyle’s tenant’s insurance policy, students will answer a series of questions related to his insurance coverage. Lesson 4: Life Insurance Your students will read: • An explanation of the difference between the term and whole life insurance categories. • Descriptions of seven different types of life insurance. Student activities: • Students will read 14 life insurance situations and decide which types of life insurance fit each situation. • Students will create a life insurance package for a family of four. The Insurance Assessment The assessment includes: • 20 True or False questions • 5 multiple choice questions • 3 multi-step problems dealing with health, property and auto insurance Meeting National Standards This module meets the following national standards: • The JumpStart Coalition for Personal Finance Education . Risk Management and Insurance Standards 1,2,3 • Family and Consumer Science National Standards: .......... Consumer and Family Resources 2.3, 2.6 Consumer Services 3.3 • National Council of the Social Studies (Economics) .......... The Role of Economic Institutions The Role of Money © 2011 C. W. Publications PAGE 2 Insurance Essential Money Management Lesson 2 Health Insurance: America is in the midst of a health care crisis. In the past, most Americans received their health insurance as a fringe benefit from their employers with the employer paying all or a majority of the cost. Those who did not receive health insurance from an employer purchased coverage for themselves directly from an insurance company. But the costs of health care and health insurance have been rising so dramatically that many employers and individuals can no longer afford the health insurance premiums leaving millions of Americans without coverage and in danger of going bankrupt if faced with a serious illness. The 2010 Health Care Reform Act passed by the Obama administration had three main goals: • Extend coverage to all Americans. • Stop the growth in health care costs and health insurance premiums. • Remove some of the abuses in the health care and health insurance industries. Whether this is successful or not and what the cost will be remains to be seen because the bill goes into affect gradually over the next few years. Here are some highlights of the new law and when each goes into effect: 2010 • Insurance • Insurance • Insurance • Insurance plans plans plans plans e l p are barred from denying coverage to children with pre-existing conditions. must provide coverage for dependent children up to the age of 26. can not set lifetime limits on how much they pay out to individual policyholders. are required to cover preventive services such as immunizations for children and cancer screening. m a S 2013 • The medicare tax rate will increase from 1.45% to 2.35% for those earning over $200,000. • A 3.8% medicare tax will be impose on unearned income (dividends, interest, etc) 2014 • Health care exchanges will be created where uninsured individuals and small businesses can shop for insurance. • Most Americans will be required to buy health insurance or pay a fine which will increase in 2015 and 2016. • Employers with 50 or more employees must buy health insurance for their employees or pay a fine per employee. 2018 • A 40% excise tax will be placed on high cost insurance policies. So here are the facts you have to face: • Sometime you are going to get sick. • Medical care is very expensive! • You can not afford the costs of medical care without health insurance coverage. • Health insurance is very expensive! • Employers are paying less and employees are paying more for their health insurance coverage. Therefore, you must find affordable health insurance coverage. And whether you are paying part of the premium or not, this makes health insurance a very important part of any job search. You must also understand what your health insurance will and will not pay for. No plan pays for everything. There will always be some type of co-payment and maximum payment by the insurance company and some things will simply not be covered at all. Never assume that if you have a policy everything is paid for. Also keep in mind that although you will not become part of Medicare until you reach retirement (or become disabled), you will pay for it throughout your life as a medicare tax withheld from each of your paychecks. And finally, the best way to avoid the health care crisis as much as possible is to lead a healthy lifestyle. © 2011 C. W. Publications PAGE 1 Lesson 2 Activity Essential Money Management Pinnacle Health Insurance Use the description of the Pinnacle Health Care Plans on page 3 to answer each of the questions. 1. What are the deductible choices with the Elite Plan? ______________________________________ 2. What are the deductible choices with the Select Plan? ____________________________________ 3. How often must the deductible be met? _________________________________________________ 4. What is the coinsurance percentage split with the Elite Plan? _____________________________ 5. What is the coinsurance percentage split with the Select Plan? .................................................. ______________________ 6. What is the premium discount for the Select Plan? ...................................................................... ______________________ 7. What is the maximum amount either plan will pay? ..................................................................... ______________________ 8. If Barbara had $242.65 in preventive dental care during the year and her deductible had been met, how much would Pinnacle pay? .................................................................................... $____________________ e l p 9. If Gary had the following dental bills during the year and his deductible had been met, how much would he have to pay? ......................................................................................................... $90 for exams $ 75 for fillings $45 for cleaning $600 for a root canal $55 for x-rays $500 for a crown m a S 10. If the Rodriguez family filled 7 generic drug prescriptions and 6 brand drug prescriptions during the year, how much would they pay out-of-pocket?.......................................................... $____________________ $____________________ 11. What are the basic differences between the Elite and Select Plans? _______________________________________________________________________________________________________________ _______________________________________________________________________________________________________________ _______________________________________________________________________________________________________________ 12. Complete the following chart by computing how much both the Elite and the Select Plans would pay toward the following medical bills. Assume that all costs are covered expenses and the $250 deductible is chosen for both plans. Elite Plan Total Bill You Pay Select Plan Pinnacle Pays You Pay Pinnacle Pays $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 13. Based on the chart, at what expense level does it make no difference if you choose the Elite or the Select Plan?................................................................................................................... $_____________________ Name: Period: © 2011 C. W. Publications PAGE 2