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Earn Your Future ®

Digital Classroom
Level 2: Truth or
Dare?

Module Resource
Guide
Table of contents
“Truth or Dare?” Module Resource Guide ..................................................................................................................... 1

Background information about the topic ..................................................................................................................... 3

Teaching the module .................................................................................................................................................... 4

Assessing student learning ........................................................................................................................................... 8

Extending student learning ......................................................................................................................................... 13

National standards for financial literacy ..................................................................................................................... 14

Related resources for students .................................................................................................................................... 15

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“Truth or Dare?” Module Resource
Guide
Topic: Risk and Insurance

Suggested grade level

Although this module may be used for all grade levels, the content was designed for grades six through
eight.

Module summary
In this module, students learn about risk and insurance. Students begin by watching a video that
introduces them to different kinds of risk followed by a quiz to measure their risk tolerance. Students
then learn that often individuals must choose to accept, reduce, or transfer risk. Next, students discover
how insurance works and learn about the factors that affect premiums and payouts. Finally, students
consider how insurance needs change over the course of a lifetime and review a range of insurance
profiles to investigate the relationship between types and amounts of coverage and cost.

Hardware recommendation
All Earn Your Future (EYF™) Digital Classroom modules are accessible on any device, however, for
optimal user experience it is recommended modules are accessed via desktop or tablet. Please note, the
EYF Digital Classroom modules are not optimized for use on mobile devices (iOS and Android).

Technical Specifications
While the EYF Digital Classroom modules will function in all browsers, including Internet Explorer,
Safari, Chrome, and Firefox, browser load speeds will vary. For best performance, it is recommended
that the most current version of your browser of choice is used when accessing the modules. Please note,
connection speeds may be impacted by factors such as highly trafficked shared WiFi access, public WiFi,
and accessing modules behind a firewall.

Key learning objectives

• Students will understand key terms and concepts associated with insurance
• Students will explain how insurance works for individuals and companies
• Students will identify reasons people pay for insurance
• Students will analyze situations in which people choose to accept, reduce, or transfer risk
• Students will evaluate the relationship between risk and the cost of insurance

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Procedure
This module is designed to be flexible to meet the needs of many different learning environments.

• One-to-one environment – Students using the module for independent, self-paced learning, can
simply move through the module at their own pace.
• Working in pairs or at centers – Students can take turns answering the questions throughout
the module and in this guide, or they can work together to answer the questions. As students may
have different reading levels, you will want to guide them to provide each group member with an
opportunity to read and comprehend the information before moving on.
• Class environment – If you are leading a group in a one-to-many environment, you can use a
projector and screen or whiteboard to make the module the focus of instruction and discussion. Use
the questions in this guide and a show of hands during each topic to gauge student comprehension.
• Customized instruction – You may also choose to use discrete elements from the module (e.g.,
video, activity, assessment) that fit your timeframe and curriculum. The navigation at the upper left
corner of the module can help you select specific parts once you have reviewed the module. Keep in
mind that many modules take students through a storyline about a character or event. If you start in
the middle of a module, you may want to provide students an overview such as the Module Summary
above.

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Background information about
the topic
Topic 1 — Accepting, reducing, and transferring risk
Risk is the possibility of harm or loss. It is an inescapable part of life. People can
engage in more risky or less risky behaviors, but some element of risk is always
present.

Risk can take different forms and result in three different kinds of harm.
Personal harm is injury to a person’s body. Property damage is injury to public or
private property. Liability occurs when a person is legally responsible for
someone else’s personal harm or property damage. Each of these three types of
harm may translate into financial loss, or a harm involving money.

To deal with risk, people can 1) accept risk, by taking actions that they know may result in harm; 2) avoid
or reduce risk, by taking precautions against it, such as by following certain safety rules or using personal
protective equipment; or 3) transfer risk, by shifting it from one party to another. A key way that people
transfer risk is through the purchase of insurance.

Topic 2 — How insurance works

With insurance, a customer transfers his or her risk to an insurance company,
which agrees to pay for certain losses the customer may suffer. The customer
makes regular payments, called premiums, to the insurance company. In return,
the customer receives an insurance policy. This is a contract in which the
insurance company promises to pay the customer, or policyholder, in the event of
specific types of losses. For example, if a tree branch falls on a car belonging to
the policyholder of an auto insurance policy and damages the roof, the customer
asks the insurance company to pay for personal harm or property damage that
results. The request for payment is called a claim.

Auto insurance is only one type of insurance. Other common insurance types include homeowner’s or
renter’s insurance, health insurance, life insurance, and disability insurance.

Insurance companies insure many people, many of whom do not make claims. The premiums of these
many customers pay for the relatively small number of large claims that customers make. Customers,
meanwhile, are willing to make relatively small, regular premium payments in order to protect
themselves from the impact of a loss—even an unlikely loss.

Topic 3 — How insurance needs change over time

Each insurance policy specifies its coverage—how much the policy will pay and
for what specific types of loss. It is important to note that people’s coverage
needs change over time. Health coverage is important at all stages of life, as even
young and healthy people can suffer costly injuries or illness. Car owners need
auto insurance, though the types of coverage required may vary depending on
the age and condition of the vehicle. Renters need renter’s insurance just as
homeowners need homeowner’s insurance, but their level of coverage may vary
depending on the number and quality of their belongings. As people, many

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choose to purchase long-term care insurance, which pays for extended stays in certain long-term care
facilities. Life insurance is also important, especially for people with young children or others who are
dependent on them for financial support. Life insurance pays a sum of money to a beneficiary, the person
named to receive it, in the event of the policyholder’s death.

Teaching the module

Preparation
It is recommended that you complete the module yourself prior to sharing it with students. This will
allow you to build your background knowledge and experience what students will experience so that you
are better able to anticipate their reactions, questions, and misconceptions.

Key vocabulary

Beneficiary A person chosen to receive money under an insurance policy

Claim A request for payment of a loss covered by an insurance policy

Coverage The types of losses and maximum payments specified in an insurance

policy

Financial loss Harm involving money

Insurance A contract in which a company guarantees to pay for the value of property
if it is lost or damaged, or to pay a specified amount for a person’s injury or
death, in return for a monthly or yearly fee

Insurance policy Contract, or agreement, between the insurance company and the customer
that protects the customer against different kinds of loss

Liability A person’s legal responsibility for damage or injury caused to someone else

Personal harm Injury to a person’s body

Policyholder Person who is covered by the insurance policy

Premium The amount paid for an insurance contract

Property damage Injury to public or private property

Risk The possibility of harm or loss

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Pre-module guiding questions
The following questions can be used to activate students’ prior knowledge and extend their learning
throughout the module.

1. Do you think of yourself as a risk-taker? What are some risks you take in your life?
2. When you face a risky situation, do you take steps to reduce your risk? For example, do you wear a
helmet when you ride a bike? Why or why not?
3. What risks do you think a person takes when he or she buys a car or a house?

Topic 1: Dealing with risk

In this topic, students learn that risk can result in personal harm, property harm, and liability. They also
discover that we have three choices in dealing with risk: accept it, reduce it, or transfer it.

Topic 1 questions/prompts

1. Think back to the mountain-bikers and other risk-takers you have learned about. Why do you think
people are willing to take those kinds of risks?
Possible answer: People take risks for the chance to receive the rewards. Activities that have risk also
have rewards. For example, mountain biking carries the risk of injury, but it is fun and adventurous.
Driving a car carries the risk of a crash, but it makes it possible to work and travel.

2. You have learned about the three types of harm—personal harm, property harm, and liability. How
does personal harm differ from the other two?
Possible answer: Personal harm represents a threat to a person’s health or well-being. The other
harms threaten a person’s financial well-being.

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Topic 2: How insurance works
In this topic, students investigate what insurance is and learn how policies, premiums, and claims work.

Topic 2 questions/prompts

1. You have learned about insurance and how it works. Explain how insurance is a win-win situation for
insurance customers and insurance companies.
Possible answers: Insurance helps customers by allowing them to transfer risk—at a price. It works
for insurance companies because they can make money by accepting the large risks of their
customers.

2. You have seen how premiums can go up for people who represent a higher risk. In addition,
insurance companies often raise the premiums on people who make claims. Do you think this is fair?
Explain.
Possible answers: It isn’t fair to punish people for having a loss. It is fair to charge people who have
shown that they pose a higher risk more than those who present little risk.

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Topic 3: What insurance do you need?
In this topic, students discover that insurance needs change over time. They learn about different types
of insurance and consider when they might be necessary.

Topic 3 question/prompt

1. In the module, you identified the kinds of insurance you might require now, in five years, and in ten
years. The types of insurance a person needs at age 20 may not be the same as the person needs at
age 60. Why do you think that is true?
Possible answer: Risk is different for people at different points in their lives. This is because a
person’s risk is affected by his or her behavior, the property he or she owns, and the responsibilities
he or she has to other people. All of these things change with time.

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Assessing student learning
Post-test questions, answers, and scoring
Students answer assessment questions that measure their understanding of, and ability to apply, the
module content. Each question is crafted to reveal complete understanding, partial understanding, or
very little to no understanding of the financial literacy skill being measured. Points, ranging from zero to
two, are earned based on answer selections.

In this module, the post-test consists of six questions for a total point value of 10. Students who achieve a
minimum score of six points will earn a badge reflecting their understanding of the module content.
Students who earn five or fewer points will have the opportunity to retake the test to try to increase their
score and earn a badge.

In Question 1, students understand key terms associated with insurance (premium,

coverage, risk, policies). These answers are correct because they accurately represent the
relationship between each term and description. If students answer incorrectly, refer to
Topics 1, 2, and 3.

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 In Question 2, students identify reasons people pay for insurance. These answers are
correct because they accurately identify the type of insurance needed for each scenario. If
students answer incorrectly, refer to Topic 3.

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 In Question 3, students demonstrate understanding of how insurance works both for
individuals and collectively. Option D is correct because it has the largest section for
premium money and the smallest section for claim money. When insurance companies
bring in more premium money than they payout in claim money, they make money. If
students answer incorrectly, refer to Topic 2.

In Question 4, students explain the relationship between risk and the cost of insurance.
These answers are correct because they accurately describe the relationship between risk
and the cost of insurance: the greater the risk, the more insurance costs. If students answer
incorrectly, refer to Topic 2.

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 In Question 5, students identify situations in which people choose to accept, reduce, or
transfer risk. These answers are correct because they accurately categorize each event with
the way it deals with risk. If students answer incorrectly, refer to Topic 1.

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 In Question 6, students recognize how life stage affects insurance needs. These answers
are correct because they accurately match each person with the types of insurance that
person needs. If students answer incorrectly, refer to Topic 3.

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Extending student learning
The following activities are designed to help students continue their exploration of key concepts. They
are intended to be used after students have completed the module.

Writing prompts/projects

1. Present students with the following scenario: They have a chance to make a reservation for a trip to a
tropical location next winter. The trip costs $1,000. This cost must be paid immediately and will not
be refunded if the trip is cancelled for some reason. However, students so have the option of
purchasing trip insurance for $50. This insurance would refund the $1,000 if the trip were cancelled
for any reason.

Direct students to write a paragraph in which they describe the dilemma they face. Students should
address the following questions:
• What are the arguments in favor of buying the insurance?
• What are the arguments against buying the insurance?
• What information might students get that would affect their choice about whether or not to
buy the insurance?

2. To help students recognize the relationship between risk and cost of insurance, have students
investigate the cost of a $250,000 term life insurance policy online. Have students create profiles of
two people—one basically healthy and young and one older with some history of health concerns,
such as heart disease or cancer, and unhealthy habits, such as smoking. Profiles should include
gender, age, height and weight, general health history, and use of tobacco.

Next, have students search for and produce term life insurance quotes for their two subjects.
(Supervise students’ searching to ensure they use a site that does not require registration or the
listing of any identifying information, such as name or phone number.)

Have students create a diagram to present their profiles and resulting insurance quotes. Students
should also produce a summary that presents their conclusions about the relationship between risk
and insurance costs.

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National standards for financial
literacy
This module is correlated to the National standards for financial literacy from the Council for Economic
Education. Standards are classified as primary or secondary. Primary standards are addressed directly
and thoroughly. Secondary standards are addressed indirectly or partially.

Primary

Protecting and Insuring – Grade 8: Personal financial risk exists when unexpected events can damage
health, income, property, wealth, or future opportunities.

Protecting and Insuring – Grade 8: Insurance is a product that allows people to pay a fee (called a
premium) now to transfer the costs of a potential loss to a third party.

Protecting and Insuring – Grade 8: Insurance companies analyze the outcomes of individuals who face
similar types of risks to create insurance contracts (policies). By collecting a relatively small amount of
money, called a premium, from each policyholder on a regular basis, the company creates a pool of
funds to compensate those individuals who experience a large loss.

Protecting and Insuring – Grade 8: Insurance companies charge higher premiums to cover higher-risk
individuals and events because the risk of monetary loss is greater for these individuals and events.

Protecting and Insuring – Grade 8: Individuals can choose to accept some risk, to take steps to avoid
or reduce risk, or to transfer risk to others through the purchase of insurance. Each option has
different costs and benefits.

Secondary

Protecting and Insuring – Grade 8: Insurance policies that guarantee higher levels of payment in the
event of a loss (coverage) have higher prices.

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Related resources for students
These resources can be used to reinforce or expand upon students’ understanding of key concepts in the
module.

Resource: Next Generation

Source: Scholastic
Description: Instructional material that helps young people understand key concepts related to risk
and insurance
Link: http://www.scholastic.com/nextgeneration/index.htm

Resource: EconEdLink
Source: Council for Economic Education
Description: Video that explains the purpose and basic operation of property insurance
Link: http://www.econedlink.org/interactives/EconEdLink-interactive-tool-player.php?iid=231

Resource: Car Insurance

Source: DMV.org
Resource: A good summary of car insurance topics, applicable to all states, including coverage,
discounts, rates, and policy basics
Link: http://www.dmv.org/car-insurance.php

Resource: Property Insurance

Source: U.S. General Services Administration
Description: An overview of the surprisingly wide variety of types of property insurance available, from
crop insurance to pet insurance
Link: https://www.usa.gov/property-insurance

Resource: Why Health Coverage Is Important

Source: Healthcare.gov
Description: A succinct explanation of the importance of getting and keeping health insurance
Link: https://www.healthcare.gov/why-coverage-is-important/

Resource: Types of Coverage

Source: Pennsylvania Insurance Department.
Description: Information from the Commonwealth of Pennsylvania that provides useful information
for consumers about all different types of insurance
Link: http://www.portal.state.pa.us/portal/server.pt/community/all_types_of_coverage/9196

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Resource: Health Insurance: Cracking the Code
Source: Teens Health
Description: A glossary of terms related to health insurance, many of which also apply to other types of
insurance
Link:
http://kidshealth.org/teen/your_body/health_basics/hmo_language.html?tracking=T_RelatedArticle

Resource: Staying Safe

Source: Teens Health
Description: A listing of safety tips young people can use to avoid and reduce their risk of injury in
many common situations
Link: http://kidshealth.org/teen/safety/

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