Types of Insurance

Types of Insurance

The purpose of all insurance is to protect yourself or your family against the financial impact of a tragedy. Insurance can be termed as a form of risk management which is mainly used to protect an individual against the risk of prospective financial loss, travel accidents, death, unemployment, theft, property destruction by natural calamities, fire mishaps etc.

Types of InsuranceWhen buying any insurance, you will save money if you pay annually or half yearly. Sometimes buying several types of insurance from the same company will save you money. There are different types of insurance policies available to cover almost anything that you can think of. All you have to do is pay the insurance agencies a specified amount every month, known as premium, so that they can take care of you by providing you financial back up in case of a sudden health emergency or a fatal incident.

Mostly there are many types of insurances offered by insurance companies. Insurance is broadly classified into two parts covering different types of risks:

1. Long-term (Life Insurance): Long-term insurance covers all life insurance policies. Insurance against risk to one’s life is covered under ordinary life assurance for a long-term period.

2. General Insurance (Non-life Insurance) is a short-term period of twelve months or less. They are classified as Fire Insurance, Marine Insurance, Miscellaneous etc.

The basic insurances are:

Health Care Insurance:

One of the most important types of insurance to have is health insurance. Health insurance consists of package of various types of insurance related to health. Health insurance covers workers in the enterprise and is mandatory in most of the states.

Life Insurance:

Life insurance can be pure insurance, which pays only on the death of the insured, or cash value insurance. Most of the people who need life insurance are better off with pure insurance and saving for retirement. The monthly premiums for a life insurance are generally based upon the age, health, and occupation information of the applicant, in addition to the total benefits to be paid to him for his policy. Having life insurance allows you to know that your loved ones will not be burdened financially upon your death.

Auto Insurance:

Auto insurance is brought for two purposes: to insure against liability you have to others and to insure against damage that others do to you or your car.? Auto insurance has a dual function, protecting against both physical damage and bodily injury resulting from a crash, and also any liability that might rise from the collision.

Property Insurance:

For many people their home is their greatest asset so it is vital to adequately protect it. When comparing policies, consider differences among deductible, coverage of property other than the house (sheds, garages, etc.), and percent of loss covered. Consider also whether the policy covers resale cost or rebuilding cost. Rebuilding usually provides better coverage, but is more expensive.