People make choices to protect themselves from the financial risk of lost income, assets, health, or identity. They can choose to accept risk, reduce risk, or transfer the risk to others. Insurance allows people to transfer risk by paying a fee now to avoid the possibility of a larger loss later. The price of insurance is influenced by an individual’s behavior.

Related Lessons on Virtual Economics 4.0

• Why Insurance and How Does it Work? (Virtual Economics Insurance Lesson 1
• Managing Risk (Financial Fitness for Life: Theme 3, Lesson 10)
• A Comparison of the Panic of 1907 to the Crisis That Began in 2007
  (Teaching Financial Crises, Lesson 1)
• The Instruments and Institutions of Modern Financial Markets (Teaching Financial
  Crises, Lesson 7)
• The Basics of Life Insurance (Virtual Economics Insurance Lesson 2)
• Everything You Ever Wanted to Know About Automobile Insurance (Virtual Economics Insurance Lesson 3)
• Why Renter’s Insurance? (Virtual Economics Insurance Lesson 4)

Free Lessons Online

• The Productive Blues (Jeans) (econedlink)
• What Does the Nation Consume? (econedlink)
• Insurance Costs and Considerations (PwC’s Financial Literacy Curriculum)
• Break a Leg (EconEdLink)

Videos

• Insurance (Virtual Economics 4.0)
• Risk and Return (Virtual Economics 4.0)
• Making Sen$e with Paul Solman: Future Unclear for Superstorm Sandy Victims Dealing with Insurance Woes (econedlink)
• Term and Whole Life Insurance Policies (Practical Money Skills/Khan Academy)
• Insurance 101 Videos (LIFE Foundation)
• Dave Ramsey Life Insurance Explained: Slams Whole Life
• Dave Ramsey On Life Insurance (Cash Value vs. Term)

Online Interactives

• Personal Finance 101 – Chat — Car Insurance (St. Louis Fed)