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640 Class 12 - Class 12 Insurance and Risk Management...

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Class 12 Insurance and Risk Management George D. Krempley Bus. Fin. 640 Winter Quarter 2008
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Advantages of Roth IRA vs. Traditional IRA Unlike a traditional IRA, all distributions from a Roth IRA are received free of income taxes, assuming the distribution us a qualified distribution. The minimum distribution rules at age 70 1/2 do not apply to a Roth IRA. The income limits for a Roth IRA are substantially higher than for a traditional IRA. Finally, unlike a traditional IRA, contributions can be made to a Roth IRA after age 70 1/2.
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Individual Health Insurance Coverages Individual medical expense plans are purchased by: People who are not employed Retired workers College students Common forms of individual coverage include: Hospital-surgical insurance Major medical insurance Health savings accounts Long-term care insurance Disability-income insurance
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Hospital-Surgical Insurance Hospital-surgical insurance plans cover routine medical expenses Not designed to cover catastrophic losses Maximum benefits per illness and lifetime aggregate limits are low Most policies cover: Hospital inpatient expenses Miscellaneous hospital expenses, e.g., x-rays Surgical expenses, covered two ways: A scheduled approach , with a maximum per procedure On the basis of reasonable and customary charges Outpatient services, e.g., emergency treatment Physicians’ visits for nonsurgical treatment These plans are not widely used
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Major Medical Insurance Major medical insurance is designed to pay a high proportion of the covered expenses of a catastrophic illness or injury Plans are characterized by: Broad coverage of reasonable medical expenses High maximum limits A benefit period , or length of time for which benefits are paid after a deductible is satisfied A deductible (typically calendar year) A calendar-year deductible is an aggregate deductible that has to be satisfied only once during the calendar year A family deductible specifies that medical expenses for all family members are accumulated to satisfy the deductible Under a common-accident provision , only one deductible has to be satisfied if two or more family members are injured in a common accident
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Major Medical Insurance A coinsurance provision requires the insured to pay a certain
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