What are the Different Types of Insurance?
Introduction
Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
The company pools clients’ risks to make payments more affordable for the insured. Insurance policy is the contract that you take out with an insurer to protect you against specific risks under agreed terms.
Insurance is a financial product sold by insurance companies to safeguard you/or your property against the risk of loss, damage or theft.
While you cannot plan for contingencies arising from such incidents, insurance policies offer a semblance of support to minimize financial liability from an unforeseen occurrence.
Types of Insurance
Insurance is categorized based on risk, type and hazards, there are 7 types of Insurance are:
- Life Insurance or Personal Insurance
- Property Insurance
- Travel Insurance
- Fire Insurance
- Liability Insurance
- Guarantee Insurance
- Health Insurance
1. Life Insurance- Life is beautiful, but also full of uncertain things. Life insurance is defined as a contract between the insurance company and the policyholder.
Life insurance acts as financial protection for your family in case of death or payment made to you on surviving the policy term.
In certain types of policies, there is an option to get critical illness benefits or create additional protection for your family if you pass away from an accident.
2.Property Insurance- The property of an individual and the society is insured against loss of fire and marine perils, the crop is insured against an unexpected decline in deduction, unexpected death of animals engaged in business etc.
Any building or immovable structure can be insured through the property insurance plan.
If any damage befalls such a property, you can claim financial assistance from the insurance provider. Under the property insurance property of a person is insured against a certain specified risk.
3.Travel Insurance- Travel Insurance covers you for all the unforeseen. No matter where you travel, domestic or international, travel insurance policy from a trusted insurance company will never let you feel alone while you travel in unknown territory.
You can have all the peace of mind and enjoy our trip or focus on your work without worrying about a thing. There are plenty of companies in the Indian market which provide you with travel insurance policies.
It becomes a bit difficult sometimes to make a choice. We, however, will compare some of them for you to get you an idea. But before that let us discuss some of the key features which any travel insurance plan.
4.Fire Insurance- Fire insurance covers the risk of fire. In the absence of fire insurance, the fire waste will increase not only to the individual but to the society as well.
With the help of fire insurance, the losses arising due to fire are compensated. The fire does not protect only losses but it provides certain consequential losses also war risk, turmoil, etc.
5. Liability Insurance-The general insurance also includes liability insurance whereby the insured is liable to pay the damage of property or to compensate for the loss of a person, injury or health.
6.Guarantee Insurance- The guarantee insurance covers the loss arising due to dishonestly, disappearance and disloyalty of the employees or second party. The party must be a party to the contract. His failure causes loss to the first party.
For instance- in export insurance, the insurer will compensate the loss at the failure of the importers to pay the amount of debt.
7. Health Insurance-The market of insurance is very competitive and when it comes to choosing the best out of many, people get confused and at that moment they seek for complete knowledge about the company and the plans offered by the company.
Health insurance plans are very useful for the future and sudden medical needs. Health insurance is the most imperative insurance products, as it comes with huge benefits, hence it has so many variants. Before buying a health insurance plan a detailed comparison is required among the few good insurance plans offered in India.
so that people could opt whatever suits to their choice and need. Health insurance policy keeps up the ever-soaring health care costs and health insurance makes sure that you and your family are tension free and free from the worries of medical charges and hospitalization.
There is a wide array of health insurance plans available in India, many at an affordable cost for the common people.
Types of Insurance Coverage
- There are so many options available for various insurance each has their coverage. Like health insurance covers necessary medical costs, from doctor’s appointment to doctor’s salary. Every adult must have health insurance as children are usually covered under one of their parent’s plan.
- Life insurance covers cost associated with dying, such as burial fees etc. life insurance can also help pay off any of your debts, such as your mortgage and loans, or for everyday expenses.
- Travel insurance- Certain companies and policies have different levels of coverage based on whether you can purchase the car rental, hotel, or flight directly on your own or through a travel agent. Coverage for trip-cancellation or interruption insurance.
- Medical insurance- It is a type of insurance coverage that typically pays for medical, surgical, prescription drug and sometimes dental expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.
Final Words
In life, unplanned expenses are a bitter truth. Sudden unforeseen expenditure can hamper your security and peace of mind. While you cannot plan for contingencies arising from such incidents, insurance policies offer great support.
There is a wide range of insurance policies, each aimed at safeguarding certain aspects of your health or assets. Simply knowing the various policies does not help. You must know how each of these plans works.
Without adequate knowledge about each of them, you may not be able to protect your finances, as well as the financial well-being of your family members. Everyone should understand various policies offered with the coverage offered with each of them.
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