Our life is constantly at risks. From the illness that prevents us from earning a living to our house burning down. The insurances have been divided in to 3 main categories that are the personal insurance, property insurance and asset insurance. It is quite difficult for us to make a general statement about the coverage needs of the new and the potential entrepreneurs as their needs largely depends on the kind of business and risk of an individual. Do you want to know that what are the types of insurance? You should read the following to know the types of insurance.
What are the Different Types of Insurance?
Life Insurance – Life insurance is a contract between the insured that is the policy holder and the assurer or insurer. In this type of insurance, the insurer promises that he or she will pay the designated beneficiary sum of money to the insurance company in the exchange for a premium when the insured person dies. Depending on the contract, the events like critical illness or terminal illness may also trigger the payment. The policy holder typically has to pay a premium either on a regular basis or in lump sum.
Property Insurance – This type of insurance provides protection against the risks to the property, such as theft, fire and some damage done by the weather. This includes insurance like flood insurance, fire insurance, home insurance, earthquake insurance or boiler insurance. In this type of insurance the property is been insured in mainly two ways, that is the open perils and the names perils. The open perils insurance covers all the causes of the loss that is specifically excluded from the policy. The named perils insurance requires the real cause of the loss to be listed in the insurance policy.
Health Insurance – This is the type of insurance that is against the risk of incurring the medical expenses among the individuals. Over here, the insurer can develop routine finance structure by estimating the overall risk of the health expenses and health care expenses. This is done to ensure that the money is available to be paid for the benefits of health care that is been specifies in the insurance agreement. The benefits of this type of insurance is been administered by the central organization such as the private business, not-for-profit entity or government agency.
Auto Insurance – This type of insurance is also known as vehicle insurance, motor insurance, car insurance or GAP insurance. It is a type of insurance which is been purchased for the cars, motorcycles, trucks and many other road vehicles. This type of insurance provides financial protection against the physical damage or the bodily injury which happens from the traffic collisions. In some of the cases, the auto insurance may also offer the financial protection against the theft and damage of the vehicle.
Travel Insurance – This is the type of insurance which covers the medical expenses, the financial default of the travel suppliers and other losses that are incurred while traveling. Delays in the traveling, loss of the personal belongings while traveling are also a part of the policy of travel insurance.
Credit Insurance – This is the type of insurance that is been offered by the governmental export credit agencies and the private insurance companies to the business entities in order to protect their accounts receivable from the loss due to the credit risks such as bankruptcy, protracted default or insolvency. This type of insurance is a kind of property and casualty insurance. It is also known as business credit insurance, trade credit insurance and export credit insurance.
Third-Party Insurance – This is a type of insurance that is been purchased for the protection against another party’s actions. This type of insurance is been purchased by the first party (insured) from a second party (insurance company) for the protection against the claims of another party.
Workers’ Compensation Insurance – This type of insurance provides medical benefits and wage replacement to the employees that is been injured in the course of the employment in exchange for the mandatory relinquishment of the right of the employee to sue the employer for negligence.
Mortgage Insurance – This is a type of insurance that compensates the investors or lenders for the losses due to the mortgage loan default. It can be either private or public depending on the insurer. It is also known as home-loan insurance and mortgage guarantee.
Marine Insurance – This type of insurance covers the damage or loss of the ships, terminals, cargo and any other transport by which the property is been acquired, transferred or held between the origin point and the final destination.