Types of Insurance
Insurance: For laymen insurance is the compensation promised by an insurer to the insured in case of any loss or damage in exchange for a periodic payment. Insurance is like a contract between the insurer and the insured. The periodic payments by the insured are called premiums in exchange for which the insurer guarantees to provide a sum of money in case of any damage, loss, injury, and death as well.
How is it helpful since the insured is paying the money beforehand and the insurer is only giving it back but that is not the case since the insurer applies interest to the premium and giving it as a whole at the time of need and not in installments so in case of loss and damage the pockets of the insured wouldn’t suffer that much coz of the expensive damage control since the insurer will compensate? There are many types of insurance and terms comes under this like adult life insurance, type of auto insurance, insurance deductible, different types of insurance in Ontario, professional indemnity insurance, life insurance online quote, etc Based on the entity insured the insurance is divided into several types of insurance as follows:
1. Auto Insurance/Vehicle Insurance.
Auto insurance is the contract between the insurer and the policyholder which protects the policyholder against heavy financial loss during Accidents as well as theft. This type of insurance includes various policies under it for the policyholder. Not only the vehicle but also the people in it at the time of the accident are covered in some policies making the compensation so much more beneficial for the insured since besides the damage repair of the vehicle the medical bills and sometimes even funeral expenses are also covered by the insurance companies. They search for an auto insurance quote and cheap auto insurance online. Depending upon the extent of compensation types of car insurance basically divided into a few policies from many auto insurance companies.
(a) Property coverage- This policy compensates the physical damage to the vehicle or its worth in case of theft
(b) Liability coverage-This includes compensation of physical damage to the vehicle as well the bodily injuries of the occupant at the time of the accident
(c) Medical Coverage-This covers the Medical treatment bills as well as rehabilitation and sometimes even lost wages and funeral expenses.
2. Health Insurance.
Due to the cost inflation that is increasing everyday medical treatments have become extremely expensive especially in the case of Cardiac Diseases, Cancer, Tumours, and some other deadly diseases the amount of financial pressure is almost impossible to handle for someone who doesn’t earn that much and that is where the health insurance comes in. This type of insurance covers the cost of medical treatments and further dental insurance helps the policyholders escape the financial pressure of expensive dental treatments. The government already provides some health insurance policies that are paid for by the taxes imposed by them. In most of the countries, it is commonly provided to the employees in almost both private and public sector alike.
- short term health insurance.
- affordable health insurance
- travel health insurance
3: Income protected Insurance
Today the salaries are very important since survival without money is impossible and this is where income protection insurance comes into play. Just like the name suggest it protects the income of an employee. It is divided into further categories :
(a) Disability Insurance– In case of any illness or injury, this insurance provides monthly financial support. Based on the extent of the injury and illness the insurance is divided into long term and short term policies covering both small and long term disability to work.
(b) Disability Overhead Insurance– This type of insurance allows the business owners to compensate for the overhead expenses in the businesses in case they are unable to work.
(c) Total Permanent Disability Insurance– If a person is permanently disabled due to an illness or injury this policy insures that he is compensated for his lifetime wages.
(d) Workers’ Compensation– If a worker is injured in any job-related accident than all or part of his wages that are lost are compensated along with his medical treatment cost
4: Casualty Insurance.
Casualty insurance is a broad spectrum of insurance that includes protection against financial losses in accidents that can fall under a variety of properties. Various types of insurance policies fall under it like auto insurance, Workers’ compensation, and some liability insurance as well. Some forms of Casualty insurances are :
(a) Crime insurance– It protects the policyholders against financial losses caused by a crime committed by a third party. For example, this insurance covers the losses caused by the fraud of any third party in business.
(b) Terrorism insurance– It protects the insured against any losses caused in any terrorist activity.
(c) Kidnap and ransom insurance-It is designed to protect the policyholders in the areas that are prone to kidnaps for ransoms and hijackings.
(d) Political risk insurance-It is a form of insurance that guarantees to compensate for the loss of any property during revolutions or any other harmful political condition that may result in heavy loss.
5: Life Insurance.
Life Insurance policies provide financial help to the family of the deceased by compensating for the income of the individual as well as some other expenses like funeral and burial etc. Cost inflation has made people think about the future of their families in case something happens to the one that earns the livelihood in the family and life insurance is one way to ensure that. In most of the states, no other person can purchase a life insurance policy of any other without their knowledge. The family is either paid a lump sum amount of money or in some cases as an annuity. There are many types of life insurance.
- Term life insurance
- Whole life insurance
- Best life insurance
- Fidelity life insurance
6: Property Insurance
It protects the insured against financial losses caused due to damage to the property in case of fire, theft, natural calamities etc. Property insurance is also a broad spectrum of insurance further classified into a few other categories for example :
(a) Aviation insurance-Protects against damage to aircraft hulls and spares and some liability risks too.
(b) Boiler Insurance– protects against financial loss due to physical damage to boilers and other heavy equipment and machinery.
(c) Builders ‘risk insurance– It protects the builders against any loss that happens to the property at the time of construction.
(d) Crop Insurance– This type of insurance is purchased by the farmers to ensure that they are compensated in case their crops are damaged due to poor weather conditions as well as natural calamities like earthquakes, flood, drought, cyclones, tsunami, etc.
(e) Fidelity Bond-This guarantees the insured compensation in case they suffer a loss due to a fraud committed by any third party or any deceitful act carried out by their employee.
(f) Marine Insurance– This type of insurance covers the compensation in case the vessels or the cargo gets damaged in the sea.
Few other types of insurance like Earthquake insurance, Flood insurance, etc compensates the losses caused due to such natural disasters.
7: Liability Insurance.
It is a very broad set of Insurance that covers the legal claims against and the insured and compensates for that. For example, if a person is injured in an accident of the insured’s vehicle than the liability insurance will protect him against any legal claims but there is a catch the liability insurance only helps the insured to cover their negligence but it is null and void in case the insured has committed the fraud or crime intentionally. It is further divided as follows:
(b) Directors and Officers Liability Insurance
(c) Errors and Omissions Insurance
(d) Prize Indemnity Insurance
(e) Professional Liability Insurance.
8: Credit Insurance.
In case the borrower is unable to repay the loan or mortgage the credit insurance helps repay that. It is a simple protection in case the borrower is unable to repay the credit. This type of insurance is not that broad and covers only limited policies which are listed below :
(a) Mortgage Insurance.
(b) Trade Credit Insurance.
(c) Collateral Protection Insurance.
There are a few other types of insurance like Business interruption insurance, Defense Base Act (DBA), Expatriate Insurance, Legal expenses insurance, livestock insurance, Nuclear Activity insurance, Media liability insurance, Pet insurance, pollution insurance, purchase insurance, Tax insurance, tuition insurance, Divorce insurance and a few more.