Insurance covers the situations in which a pure form of risk such as loss of any property or life is involved. However, people can also insure against their own specific risks such as a football player may insure against his leg injuries. The main insurance policies sold are described below.
1. Life Insurance
Life insurance as the name suggests is a policy in which the
insurance company pays money at the death of the person. The amount is paid to the beneficiaries of the person in either installments or lump sum. The
beneficiaries can be family, charity or any one who is named by the policy holder for inheriting the money. After the death the policy can be given up for cash or it can be used to borrow money.
Annuities
According to these plans the insurance company keeps paying retirement income to the policy holder and in case he dies before the total number of payments guaranteed by the company then the rest of the payments are made to the beneficiaries.
Dividends
Most commonly paid on life insurance, dividends are refunded if the money in the form of premium exceeds the administrative costs and benefits that were to be provided. This type of policy is participating policy and it may also include the profit that the company had earned after investing the premium.
2. Health Insurance
Health insurance is to insure a person against illness and all the medical expenses hence procured. These expenses include surgery, tests, medical care, medicines and hospitalization. The reason for this type of insurance becoming very common is the high health care prices. In case of no such policy, a person may have to incur huge losses due to expensive treatment and may end up in debt or even
bad credit. In health insurance dental insurance is the fastest growing.
3. Property Insurance
Property insurance is taken out for protecting assets against any loss. This insurance covers fire, earthquake, flood, theft and other such risks that can give huge losses to the policy holder.
Home Insurance
The
Home owner insurance is to protect the policy holder's house and the interior objects.
4. Automobile Insurance
The second type of property insurance is
car insurance which is the most widely bought insurance of all types. Since we have to drive a car and when we bring the car on the road, even with very careful driving damages can still occur. The driver is responsible for the loss. This insurance pays for the damages due to the accident and in some case also covers the liability claim against the person driving. In USA you need to buy insurance to be able to bring the car on the roads.
5. Liability Insurance
The
liability insurance is to get protection against financial losses in case some one gets hurt by your actions or any damage that you might do to some else's property. The legal claim can be of any nature. For example some one falls on your door step because of some broken fence he may bring lawsuit for the injuries. The protection given is in two forms, one is legal defense in lawsuit case and the other is indemnification in which the effected is paid on policy holders behalf after court verdict or. Settlement
6. Credit Insurance
In this insurance if some thing bad happens such as death, disability or unemployment then the insurance company pays part or all or policy holder's loan.
7. Financial loss Insurance
In this type of insurance the insurance company will pay for the losses to the company if the sale is affected due to a fire or any damage to the factor.
8. Marine Insurance
This insurance covers the damage or complete loss of gods due to ship wreck, fire or any other mishap.
9. Travel insurance
The
travel insurance is taken by people traveling to other countries. The basic purpose of buying it is that health problems can occur at any place any time and since medical expenses can be sometimes unbearable, a disease or accident may completely ruin the purpose of travel. This insurance will pay for the medical treatment, loss of personal things or personal liabilities.
