Insurance

Insurance protects us against major financial losses. It can take many forms, such as health, disability, life, renter’s, or homeowners insurance, but it all is designed to keep us, or our loved ones, from becoming destitute if something happens to us, our homes, or our property. Some of your participants may only be familiar with what they received through the services of the Indian Health Service (IHS) or the Veterans Administration (VA). Recognizing how insurance works, with or without continuing IHS or VA services, is important to helping manage finances.

Depending on their circumstances, here are several types of insurance that your students should consider:

• Health insurance pays for some, if not all, of any doctor or hospital bills. It can also cover prescription drugs, physical therapy, and sometimes vision care and dental care. If your students are able to get health insurance from their employers, strongly encourage them to do so, because purchasing an individual policy can be very expensive. However, even those who cannot get insurance from an employer should purchase an individual policy on their own. Even a short hospital stay can cost thousands of dollars, and a serious injury or illness can lead to financial ruin.
• Disability insurance pays money to the policyholder if he or she is sick or injured and unable to work for a long time. Many employers offer disability insurance; or, individuals can purchase it on their own. Some statistics show that a person is much more likely to be disabled and unable to work than to die in an accident, so disability insurance can prevent serious financial consequences if a person is unable to work.
• Life insurance pays money to a person (known as the beneficiary) chosen by the policyholder after the policyholder dies. Life insurance can help a family avoid financial downfall and live as normal a life as possible after the death of the primary wage earner.
• Renter’s insurance pays the policyholder if his or her possessions are stolen or if they are destroyed in an apartment fire or flood. Renter’s insurance generally is not very expensive and therefore it generally is a good idea to purchase this type of insurance.
• Homeowners insurance is required when a person gets a mortgage to buy a home. It covers the same kinds of things renter’s insurance covers (possessions, etc.). In addition, it provides protection for the physical structure of the home itself.

When your students are considering the purchase of any type of insurance, suggest that they compare costs among at least three companies. Have them ask how raising the deductible (the amount paid before the insurance company starts paying) will save on premiums.

Also encourage your students to check insurance prices every year, because companies and policies do change and they might be able to get the same coverage for less money. Keep in mind that the best time to buy insurance is when nothing is wrong. For example, it is much more difficult (and expensive) to buy health insurance after a person has become sick or developed a disease than it is when the person is healthy.