Introduction
The insurance industry is vast and confusing for anyone seeking an insurance policy to invest in or an appropriate type of policy cover. This is because there is a lot of varied information out there about insurance and it may be slightly overwhelming to begin with. That is why we have gathered all the necessary information you should know about the types of insurance and what they include here. It starts with auto insurance and extends to life insurance – we can help you with everything.
Life Insurance
It is an insurance product under which an insurance policyholder pays a regular premium to an insurer or assurer in exchange for a lump sum payment to a beneficiary on the death of a named person or on the occurrence of another event. Other common events that can lead to making the payment include; In this case, other events such as terminal illness or critical illness may also be considered where provided in the contract.
There are two primary types of life insurance: Term and Whole Life.
- Term Life Insurance: This is the basic insurance that pays a face amount to beneficiaries upon the death of the policyholder during a stated period, say 10, 20 or 30 years. It only offers a cash payout upon the death of the policyholder provided the death occurs within the entitled term.
- Whole Life Insurance: Also called straight life, whole packages the insured for life, as long as the premium payment is made regularly. This policy builds up funds value that the policyholder should borrow against this policy or surrender for the funds value.
Health Insurance
The term health insurance is used where in the event of an illness or injury one is shielded from a huge bill that they would not be able in any way to meet. The coverage of those plans also differs with region, plan, and insurance company.
- Private health insurance: Insurance of this kind is made under a private insurance company. In general, it can be obtained in form of the Personal, Group, Individual and Family plan.
- Medicare: Older people and certain younger disabled persons and individuals with End-Stage Renal Disease may receive benefits from a health insurance program operated by the United States federal government.
- Medicaid: A combined federal and state program that pays some of the medical bills for certain low-income individuals.
Auto Insurance
Auto insurance is protection against financial loss specifically from physical damage and or death or injury resulting from auto accidents or from liability for causing such accidents…
- Liability Coverage: This includes the expenses concerning the damages or harm to the third party or their properties, and your defense in case you are taken to court.
- Collision Coverage: This part adjusts for your car if it is damaged or destroyed by an accident from another car or object, whether you are at fault or not.
- Comprehensive Coverage: This includes any harm to your car apart from the physical destruction and is usually associated with fire, theft or malicious damage.
Homeowners Insurance
Homeowners insurance offers coverage for the loss of your house and your belongings if the kind of policy you have purchased is accidental.
- Dwelling Coverage: This protects the physical structure of your home, such as the window, the doors and any other fitting that may be installed within the house.
- Personal Property Coverage: This covers your clothing, your furniture, the appliances, everything that you have in your house or in your business.
- Liability Coverage: This is important to you in case a third party sustains an injury on your property and you stay bonded to cater for the medical expenses or legal charges.
Disability Insurance
Disability insurance covers some of what you earn if you’re unable to work due to illness or injury. This type of insurance is meant to cover usual monthly expenses like rent, mortgage or utilities if you get sick or are injured and can no longer work.
- Individual Disability Insurance: This type of policy offers protection for individuals with no access to disability insurance through employer, business people or those with small businesses.
- Group Disability Insurance: This is offered by an employer and protects the employees in case of sickness or an accident.
Let us now have a look at the various types of insurance to enable us to determine which kind of insurance best suits us. Knowing everything about life insurance, car insurance and every other insurance policy that is out there is vital in an effort to protect one’s future. Now, the reader should be familiar with what types of insurance exist and how they can be useful to them.