The Main Types of Insurance

Written by: David Scott

First of all, it is good to know what insurance means in general? Insurance is a legal agreement between the insurer and the insured, so between these two Parties, which means that this stipulation between the Parties provides financial safeness in case of a loss or an emergency. The main target of the insurance is to secures somebody financially in difficult and unexpected situations. It provides certainty, protection, shares the risk between the Parties, it helps somebody to save money, live a relaxed and predictable life.

The following seven are the main types of insurance: 

  • Health Insurance
  • Life Insurance
  • Disability Insurance
  • Long-term Care Insurance
  • Homeowners and Renters Insurance
  • Liability Insurance
  • Automobile Insurance

Health Insurance

Nowadays, it is very important to have a health insurance for every person in the world, since focusing on our health is a very emphasized thing. It is important to see that an urgent medical event can happen in anytime of our life, and in a situation like that, affording these costs by the insurer – which can come after an accident or a medical emergency – is a very big help. It should be highlighted that in a lot of countries there is no opportunity to get free health care, especially overseas, so you have to pay for the hospital services in every case. It can be very expensive, so this is a reason why it is so recommended to have a health insurance for yourself.

Life Insurance

Life Insurance is a worldwide known type of insurance in contrast to the previous one. The most famous type of life insurance is term insurance. The concept of this insurance is that you pay a fix amount of money in every month to the insurer company, as long as you agreed in the amount period with the insurer. If something happens to you, for example you pass away, your family will get the amount of money, but only if you die within the termed period. In another case, if you live through this fix period of time, the money you paid for the insurer will stay at the insurer company. The other form of life insurance is whole life insurance (permanent insurance) which means that it will be paid in ever case to your family, even if you pass way or not in the termed period.

Disability Insurance

You usually hear about this type of insurance in case of working at a big company. Corporations usually offer disability insurance to the employee if he/she suffers from a disability, and he/she can no longer work because of it. In a practical way, it means that the disability insurance becomes the salary of the workers. It has a lot of types, and it is very important to highlight that the employee has to become temporarily or permanently disabled. The main target of this insurance is to provide the employee with income even if he/she can’t work at all.

Long-term Care Insurance

If you want to be prepared to any kind of situations, you have to think about Long-term Care Insurance. This type of insurance helps you to cover all of your additional cost, which is not included in your Health Insurance. It especially covers your costs in the future if you have a disorder or disability or other chronic medical condition. It helps you to afford a nursing home, an adult day center, your homeplace or an assisted living facility.  This type of insurance can be very expensive, so it is a good idea to start to think about it in your 50s.

Homeowner and Renters Insurance

Since your house is the biggest value of your life, in the past 10-15 years, this type of insurance is getting more and more popular, even if somebody lives in his/her own house or rents a flat. It requires you to pay a monthly fee, and therefore in return if something happens with your home the insurer helps you to cover all of or big part of your costs. Imagine that one day something starts to soak in your flat, and it gets everything wet. You have to call a specialist to fix it, and if it is an urgent case, it usually costs more than in a regular situation. If you have a Homeowner Insurance, the insurer will pay for it, and you don’t have to make extra outgoings.

Liability Insurance

Liability is a very important part of our life, especially because it can put you into a legal case. Everybody knows a situation in which he/she causes a damage to somebody else, or to someone’s property accidentally, and the first thought that comes up to his/her mind is that he/she has to pay a lot of money for the damage. Liability Insurance provides to pay for the damage instead of you. It is important to know that Liability Insurance does not cover crime and intentional acts. It covers all the cost of claims, legal costs and payouts which are found legally liable.

Automobile Insurance

We are more than sure, that you’ve heard about it before. Every car owners should know about this insurance, which helps them to pay for the car crash. It is a contract between the car owners and the insurer, which protects the owners against financial loss in a case of an accident. The good side of this insurance is that in a case mentioned above, the insurer should pay for the insured and for the other party as well (who suffered the accident because of the insured). The other name of it is Car Insurance, and it is good to know that having a Car/Motor Insurance is a mandatory thing for every vehicle owner. 

Leave a Comment