Thus, people can select an appropriate insurance plan or plans according to their own and their family’s needs. But a proper analysis is must before making the final decision.
Insurance can either be Personal or Business one, but the main goal of insurance is to insure you or your business against a possible loss. Term insurance can be described as: A small loss that prevents a large, possibly devastating loss.
Insurance protects you against financial loss in a future if you have an accident. Insurance is a contract between you – a policyholder (person or entity buying the insurance), and the insurance company. Policyholder’s payments are called premium.
There are a lot of types of insurance, but the main ones are as follows:
Auto insurance also known as
- vehicle insurance
- car insurance
- motor insurance
It is purchased for cars, trucks, motorcycles and other vehicles. The primary use of auto insurance is to provide protection against losses incurred as a result traffic accidents.
Auto insurance provides:
a) Property coverage – it pays for thief or damage of your car
b) Medical coverage – it pays for your responsibility to others for bodily injury or property damage
c) Liability coverage – it pays for the cost of treating injuries, lost wages or even funeral costs.
As auto insurance, home insurance provides compensation or insure you against damage of a home from disasters. Sometimes it’s called hazard insurance or homeowners insurance as well.
This is the type of insurance that covers private homes. It can include:
• losses occurring to one’s home
• loss of home use
• home contents
• loss of other personal possessions of the homeowner
Health insurance is the type of insurance that pays for medical expenses. It also known as:
• health coverage
• health care coverage
• health benefits
Policy can be purchased by individual or company on group basis to cover its employees. Health insurance policy is a lengthy contract. Policyholders should pay premiums to help protect themselves from unexpected healthcare expenses. Insurance contract can be renewable annually or monthly.
Life insurance is also known as life assurance. Insurer (or Life Insurance Company) agrees to pay sum of money upon the occurrence of the policyholder’s death, illness, critical illness, terminal illness or other event. Policyholder pays a fee at regular intervals or in lump sums. This
As with most insurance policies, life insurance is a contract between the insurer and the policyholder whereby a benefit is paid to the designated beneficiaries if an insured event occurs which is covered by the policy.
Insured events that may be covered include:
• Protection policies
• Investment policies
Each contract may include limitations of the insured events. Usually they a written to limit the liability of the policyholder: for example claims relating to war, suicide or fraud. Any misrepresentations by the insured on the application will cause the nullification of the contract.