Insurance is a way of managing the risks that a person is exposed to during a lifetime by transferring the financial responsibility to an entity that can be an insurance company. It involves a contract between an individual and an insurer. The person who benefits from this risk management is called the insured individual or the policy holder.
All types of insurance have a compensation plan. The principle is simple: if you suffer losses, you get money to support them. But, the probability for this to happen is usually low. This is where insurance companies win, so both parties can benefit. Different types of insurance policies exist and the following are among the most common:
This type of policy is one of the most important, as it is meant to provide a payment to its holder in the case in which death occurs. The holder has to pay premiums for a period of time, or for the entire lifetime, depending on the choice that the person has made. If you have a live insurance, your family is protected financially in case you have and accident and die.
Insuring your health is also important, because you can benefit from a sum of money to pay your medical bills when you are not working anymore. If you have an accident, or you become injured for different reasons, you can get a financial compensation. There are different types of health insurance, such as critical illness, income protection, medical, etc. Each of them can pay different things that are related to health.
No one should drive without this type of insurance. Because a car can be as expensive as a home and even more expensive, repairing it in case of an accident can be like repairing a home after a fire. The costs are huge and the best way to be prepared is to have coverage for your vehicle. Without coverage, you can also be fined, making your situation worse. You can be compensated even if the vehicle is stolen.
Homes must be insured because of the risk of fire and other hazards. Homeowners insurance covers any loss that could occur in a home and can include property and liability insurance. Without having this type of coverage, paying the expenses in case the home is repaired may be impossible due to the high costs.
If you ever become a person with disabilities, this type of insurance is meant to help you financially in this particular case. Some people never think about such an occurrence, but statistics prove that it can happen. It would be wise to take precautions and get disability coverage.
Travel insurance is useful for people who like to travel, especially when they go overseas. With this type of coverage, all your belongings can be secured in case they are lost or stolen, as you can get compensation for this loss. Going on a holiday without having travel insurance is very risky.
This type of coverage is meant to provide compensation to employees in case they become injured or ill while they are at their workplace. Compensations can be in the form of wage replacement or payments for medical bills. In the majority of cases, workers can receive the compensation regardless of who is responsible for the injury.
Along with the liability coverage provided by the home and auto policies, you may also need separate liability coverage. This is meant to pay any legal fees and damage caused by negligence to other people. It is meant to protect you from liability imposed by lawsuits and other claims.
Long-term Care Insurance
The health coverage cannot pay long-term expenses, so you require a different type of coverage called long-term insurance. The day you will actually need this protection cannot be predicted, but you can be assured you will be protected from the day you decide to become insured. If you haven’t done it until the age of fifty, from this point it becomes a must.
The general type covers different losses that could occur due to certain events. You could lose some of your assets, your house or your car. This type of insurance can be good for those who want to cover more than one thing, but want to pay a lower premium and a single policy for everything.