Initial Date Of Blog Posted : 2018/03/20
Insurance is a means of protecting you from the financial loss that can result if an event occurs and you don’t have a way to cover the loss.
Insurers are like doctors or other professionals in that they help people manage their risks. Insurers are also like banks, which are responsible for managing money on behalf of their customers. In fact, many insurance companies were originally banks that had decided to offer insurance products as well.
The insured pays premiums to the insurer for coverage. The more risk involved, the higher the premium will be. The insured can also choose from various levels of coverage depending on what type of risk he or she is trying to hedge against.
Principal Of Insurance:
Insurance is a financial intermediary that involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be an insurable risk, the risk insured against must meet certain characteristics.
On one hand, insurance can increase fraud because it allows individuals to self-insure. On the other hand, it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies.
Now lets talk about types of insurance, there are almost thirteen type of insurance, they are listed bellow:
Health Insurance :
Health insurance covers the cost of medical treatments, which is why it’s so important to your health and well-being. Dental insurance, like other types of health insurance, protects policyholders for dental costs. In most developed countries, all citizens receive some health coverage from their governments, paid for by taxation. In most countries, health insurance is often part of an employer’s benefits.
Life Insurance :
Life insurance policies provide financial benefits to family members or other designated beneficiaries, and may include income to an insured person’s family, burial, funeral and other final expenses.
The primary purpose of life insurance is to protect the financial well-being of dependents in the event of the policyholder’s death.
Most policies require the decedent’s signature to be on their application for a policy. A person must be at least 18 years old in order to sign a life insurance policy. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. In most states, a person cannot purchase a policy on another person without their knowledge.
Auto Insurance or Vehicle Insurance :
There are other types of coverage that may be required in some states or that you may want to purchase as part of your policy, such as: Collision coverage, for damage to your car from a collision with another vehicle or an object. Comprehensive coverage, for damage to your car from events other than a collision, such as fire, theft or vandalism. Uninsured motorist coverage, for costs associated with an accident caused by a driver who does not have insurance. Underinsured motorist coverage, for costs associated with an accident caused by a driver who has insurance but not enough to cover all the costs associated with the accident. Personal injury protection, for medical and funeral costs and sometimes lost wages and other expenses, regardless of who is at fault in an accident.
Property Insurance :
Property Insurance protect the from fire theft or whether damage .
Some examples of property insurance policies are:
Home insurance
Renters insurance
Condo insurance
Landlord insurance
Mobile home insurance
Manufactured home insurance
Flood insurance
Earthquake insurance
Windstorm insurance
Business interruption insurance
- Others type of Insurance are :
- Gap insurance
- Income protection insurance
- Casualty insurance
- Burial insurance
- Liability Credit
- Insurance financing vehicles
- Closed community and governmental self-insurance
Reference: Wikipedia