Introduction to Insurance Planning

Insurance Planning:

Understanding insurance can be tricky, but we all need insurance in one way or another. Think about car insurance like this: Car insurance is when a group of people pays into a pool of money that will be used if one of the members of that pool gets into a car crash. It helps to pay for repairs and, if the person was the person who caused the collision, to pay for the other person's damages as well.

Risk Level:

The reason why insurance costs can vary from person to person is due to something you can think about risk level. Let's take the previous example. Let's say person X paid into this pool but then received and was found guilty of excessive speeding. An insurance company will look at that and think that this person is more likely to get into a crash because of their irresponsibility. Therefore, that person's premiums (the money they pay into the insurance plan) will increase to adjust for the likelihood of a crash caused by person X. There are other reasons why your insurance premium might be higher, including your age and even gender. We'll explore more throughout this module.

 

image.png(Penn State University)

 

 

Purposes of Insurance Planning:

  • While this topic is sensitive, we all experience risk in specific ways.
  • You have to evaluate different risks in your life and how to mitigate those risks in case bad things happen. It might seem like it'd never happen to you, but the thing is, you never know.
  • Recovery from an unexpected event is much easier with insurance.

 

Choosing Appropriate Insurance Plans:

  • Insurance is important, but there are different types of insurance and different insurance plans within each type.
  • Therefore, choosing the right insurance plans for you is very important.
  • For example, if I don't have a car, would I really need car insurance?
  • If I own my house, would I need renter's insurance?

 

College Students:

  • Most colleges require students to have health insurance during their time enrolled.
  • UNC Charlotte students must have health insurance, whether through a guardian, personally, or through Student Blue, a university-provided insurance plan.
  • The student is responsible for evaluating their options regarding health insurance at college. Do not pay for another plan if you already have acceptable health insurance.

Next Chapter: 

How do I Know if My Insurance Plan is Right for Me?

All Chapters:

[Chapter 1]: Introduction to Insurance Planning

[Chapter 2]: How do I Know if My Insurance Plan is Right for Me?

[Chapter 3]: What Are Some Key Terms I Should Know?

[Chapter 4]: How Do I Find the Balance Between Cost and Coverage?

[Chapter 5]: What Mistakes Should I Avoid at All Costs?

[Chapter 6]: How Can I Implement an Insurance Budget?