HE 315
RISK PROTECTION FOR YOUNG FAMILIES
by Jean w. Bauer
Family Resource Management Extension Specialist
Risk protection, or insurance, is not just something to compete for your limited dollars; it protects you and your family against a major financial loss. If people depend upon you for financial support, consider protecting them through insurance on yourself.
Generally, families insure against three types of loss: life, health, and property. There are many kinds of policies covering each of these types of loss.
This bulletin explores the types of losses and the major types of insurance for these losses.
HEALTH INSURANCE
Health insurance for a member of a young family is expensive if it is purchased by the individual. Many employers include health insurance as an employment benefit. Sometimes the employee does not have a choice of taking the insurance or not; he or she is automatically covered. Family plans often can be purchased by the employee.
Group health insurance, provided by an employer, is less expensive because more people are enrolled in the plan, and thus the risk or potential cost per person is less. The risk is spread over a greater number of persons, and the company’s chances of having to pay claims on all the persons insured is less. You probably know people who have never made a claim against their health insurance, while others routinely make claims. Group insurance also can be purchased through many professional, fraternal, or other organized groups.
There are two basic types of health insurance: Hospital-Medical-Surgical covers hospital care and doctor bills for services performed in the hospital. In some cases this covers surgery performed in the doctor's office.
Major Medical expands the basic hospital-medical-
surgical coverage to include such charges as medication and blood, as well as hospital charges for prolonged hospital care.
Before buying health insurance ask:
■	How many days in the hospital are covered?
■	How much will the policy pay per day for room and board?
■	How do the policy payments for room and board compare with average charges for room and board in your community?
■	How much does the policy pay for related hospital expenses—anaesthesia, X-rays, drugs, etc.?
■	Are there waiting periods before certain personal conditions are covered?
■	Is a deductible charged toward hospital expenses before benefits begin?
■	Is the policy renewable? Under what terms?
■	What are the limitations or exclusions of the policy?
LIFE INSURANCE
Life insurance is protection against loss of income or expenses due to an untimely death. The amount of life insurance needed by each family member varies with the number of dependents and life cycle of each individual family member. A single person or couple without children needs consider ably less life insurance than a single parent or a couple with children. The more dependents an individual has, the more insurance that person needs. Life insurance in this case is used as a substitute for the income from the deceased.
Cooperative Extension Work in Agriculture and Home Economics, State of Indiana, Purdue University and U. S. Department of Agriculture Cooperating. H. G. Diesslin, Director, West Lafayette, IN. Issued in furtherance of the Acts of May 8 and June 30, 1914. It is the policy of the Cooperative Extension Service of Purdue University that all persons shall have equal opportunity and access to its programs and facilities without regard to race, religion, color, sex, or national origin.

• COOPERATIVE EXTENSION SERVICE • PURDUE UNIVERSITY • WEST LAFAYETTE, INDIANA •