Section 22.3

Chapter 22 • Buying Insurance Succeeding in the the World of Work

22.3 Health and Life InsuranceHealth and Life Insurance

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Section 22.3Section 22.3Health and Life InsuranceHealth and Life Insurance

Chapter 22 • Buying Insurance Succeeding in the World of Work


Health InsuranceHealth InsuranceHealth InsuranceHealth Insurance

Health care costs are rising.Health care costs are rising.

How can you control your medical bills?How can you control your medical bills?

See if you can participate in your See if you can participate in your employer’s health insurance plan.employer’s health insurance plan.



Types of CoverageTypes of Coverage Types of CoverageTypes of Coverage

The three main types of health coverage The three main types of health coverage are:are:

major medial coverage,major medial coverage,health maintenance organizations health maintenance organizations (HMOs), and(HMOs), andpreferred provider organizations preferred provider organizations (PPOs).(PPOs).



Major Medical CoverageMajor Medical CoverageMajor Medical CoverageMajor Medical Coverage

MMajor medical coverageajor medical coverage is insurance is insurance that covers hospital and medical that covers hospital and medical expenses, allowing free choice of expenses, allowing free choice of hospitals and doctors but requiring a hospitals and doctors but requiring a deductible and coinsurance.deductible and coinsurance.



Health Maintenance OrganizationsHealth Maintenance OrganizationsHealth Maintenance OrganizationsHealth Maintenance Organizations

Health Maintenance Organizations Health Maintenance Organizations (HMOs) is a type of health coverage(HMOs) is a type of health coveragewith no deductibles.with no deductibles.

Members pay a small Members pay a small copaymentcopayment for for doctor visits.doctor visits.



Preferred Provider OrganizationsPreferred Provider OrganizationsPreferred Provider OrganizationsPreferred Provider Organizations

PPOs offer some of the low-cost PPOs offer some of the low-cost advantages of HMOs, but allow more advantages of HMOs, but allow more freedom to choose your own doctor.freedom to choose your own doctor.

With PPOs, you often pay higher With PPOs, you often pay higher premiums and copayments than with premiums and copayments than with HMOs.HMOs.



Types of CoverageTypes of CoverageTypes of CoverageTypes of Coverage

One limiting factor of the HMO is the One limiting factor of the HMO is the gatekeeper system.gatekeeper system.

You choose a primary doctor, and can You choose a primary doctor, and can only see another doctor at the only see another doctor at the recommendation of the primary.recommendation of the primary.



Types of CoverageTypes of CoverageTypes of CoverageTypes of CoverageWith a PPO, any doctor in the program is With a PPO, any doctor in the program is available.available.

One disadvantage to HMOs and PPOs is that One disadvantage to HMOs and PPOs is that doctors in their networks may be discouraged doctors in their networks may be discouraged from prescribing costly treatments or surgical from prescribing costly treatments or surgical procedures that may not be absolutely procedures that may not be absolutely necessary.necessary.



Types of PlansTypes of PlansTypes of PlansTypes of Plans

The two types of health care plans are:The two types of health care plans are:

group plans, andgroup plans, and

individual plans.individual plans.



Group PlansGroup PlansGroup PlansGroup PlansMost group plans are offered through Most group plans are offered through employers.employers.

Premium costs are lower, because risk is Premium costs are lower, because risk is spread over a large number of people.spread over a large number of people.

Group plans usually have a deductible, Group plans usually have a deductible, coinsurance, and major medical coverage.coinsurance, and major medical coverage.



Individual PlansIndividual PlansIndividual PlansIndividual Plans

People who are not enrolled in group People who are not enrolled in group plans can buy insurance through an plans can buy insurance through an individual plan.individual plan.

This coverage can be expensive.This coverage can be expensive.



Disability CoverageDisability Coverage Disability CoverageDisability Coverage

Disability insurance pays you a Disability insurance pays you a percentage of your salary if you are percentage of your salary if you are unable to work.unable to work.



Disability CoverageDisability Coverage Disability CoverageDisability Coverage

Short-term disability coverage usually Short-term disability coverage usually covers you for only a few months.covers you for only a few months.

Long-term disability coverage can pay Long-term disability coverage can pay for a lifetime of missed work.for a lifetime of missed work.



Life InsuranceLife InsuranceLife InsuranceLife Insurance

If others in your household count on If others in your household count on your salary, life insurance will provide your salary, life insurance will provide money to them in case you die.money to them in case you die.

Many employers offer life insurance, but Many employers offer life insurance, but many people buy additional coverage.many people buy additional coverage.



Buying Life InsuranceBuying Life InsuranceBuying Life InsuranceBuying Life Insurance

If someone depends on you for your If someone depends on you for your earning power, you should have life earning power, you should have life insurance.insurance.

If you have no dependents, you may not If you have no dependents, you may not need life insurance.need life insurance.



Buying Life InsuranceBuying Life InsuranceBuying Life InsuranceBuying Life Insurance

The amount of life insurance you need The amount of life insurance you need depends on:depends on:

how old you are,how old you are,whether you have dependents,whether you have dependents,how much debt you have, andhow much debt you have, andhow much insurance you can afford.how much insurance you can afford.

Chapter 22 • Buying Insurance Succeeding in the the World of Work


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Section 22.3