Insurance means protecting yourself or your love once or any assets at risk, losses or damages. basically threat covered is only related to financial matters. It is a contract between insurance company and insurer. agrees in order to cover those losses or damages. Here we are going to look forward how many types of insurance along with other important insurance types which you can get financially covered.
While comprehensive insurance is always important, it is also feasible that you own as much as coverage. But also make sure that paying excessively insurance premiums may leave you into financial burden. So this article gives you an enough explain about what types to insurance are absolutely essential for an individuals or corporate houses, as well as we will also give you outline on what are extra insurance cover which you probably opt out to save enough insurance premium going from your pocket.
How Many Types of Insurance?
Risk looks everywhere. When you stay in high-rise apartment, when you drive a bike, and more. When you ask how many types of insurance then, overall your risk coverage by insurance companies are widely categorized as:
- Life Insurance.
- General Insurance
You should understand what is insurance? before we start discussing with insurance types. Let us understand all the major types of insurance and gain enough knowledge here.
What is Life Insurance?
Life insurance is an agreement that has financial compensation in the event of disability, retirement, death of you or your loved family member. Lifestyle insurance is crucial if you die unexpectedly. Expenses like: electricity bills, water bills, home loan payments or other mortgage installments would definitely suffer financial hardship. Insurance company on maturity usually gives lump-sum amount or pays you on monthly basis until the death of nominee.
Life insurance play as a supporting role against family’s financial security when you are not alive. Mostly insurance companies have already customized life insurance products depending upon needs. You can choose from the different types of life insurance products which is most suitable for you.
Types of Life Insurance
Life insurance products are design to cover your family expenses at such critical times. You should understand importance of insurance along with different insurance types. Let us understand some of the life insurance types below.
These insurance policies are typically the most reasonable form of life insurance products since premiums is economical compared to some other lifetime insurance plans. Term Insurance only provide purely life cover and no other maturity benefits. This means that, If the life insurance policyholder is alive, then there isn’t any pay out on maturity.
Endowment plans have one unique feature in addition to term insurance plans which is maturity benefit. Unlike term plans, endowment plans pay you the amount guaranteed, and income throughout the policy term even when policyholder is alive. However, endowment plans are slightly costs then term insurance plans.
Unit Linked Insurance Plans (ULIP)
ULIPs vary in with one unique concept from other types of insurance. These policies are typically a mixture of investment and insurance, which is not the same case with other investment options like: mutual funds or stock market. Overall performance of ULIP is linked to markets. You can choose the allocation between stock market and debt markets. The worth of the investment portfolio can be tracked with their NAV (Net Asset Value) published on daily basis. These policies pay you the amount assured based on investment portfolio at the death or maturity of policy holder.
Whole Life Policy
A whole life insurance policy covers a policyholder over his lifetime. The unique feature of this policy is that policy is not defined by number of years, there is a life protection throughout policyholder lifetime. The policyholder pays average premiums till his death, upon which the corpus funds accumulated is given out to the nominee.
Money Back Policy
This policy is one type of customized endowment insurance types. This offers regular repayments throughout the plan term. Some portion of your sum assured is given out at regular intervals. If the policy-holder survives till the maturity, then the person gets their balance amount assured. In the event of death before policy maturity, nominee gets the insured amount.
What is General Insurance?
A general insurance is a contract that protect you from financial loss everything apart from life. Insurance company compensates you against financial losses due to any kind of liabilities like: vehicle damage, fire or thief at home, health problems, cancellation of flights or hotels during travel and more.
Almost anything apart from life insurance policies are covered under general insurance. These types of insurance policies are mostly for shorter durations i.e. not more than twelve months; however, policyholders have an option either to choose any alternative insurance products or renew the same insurance policy.
Some of the common types of general insurance are Property Insurance, Liability Insurance, Legal Expenses Insurance, Health Insurance, Disability Insurance, Interest Rate Insurance, Vehicle Insurance along with other types of Insurance. Let us understand few of the general insurance in detail.
Health insurance is one of the important insurance types after life insurance. It addresses the essential medical expenses, starting doctor’s appointments towards operations. In 2009, over sixty percent of all of the personal bankruptcies were due to health insurance expenses. It is difficult to come across affordable health insurance, especially for those who have your pre-existing health issues. Every one need health insurance in today’s lifestyle. Kids are covered under family health insurance plans. Consult your insurance consultant to determine what type of policy is suitable for you.
Health Insurance Coverage
- Critical Illnesses Treating.
- Hospitalization Expenses.
- Day Care Treatments Expenses.
- Pre and Post Hospitalization Medical Bills Expenses.
Disability insurance is mostly similar to life insurance mainly because, it offers financial coverage against permanently or temporary disability happens to you. When you are injured and lead to any permanent disability, such insurance types will compensate against loss of income also with medical expenses for short and long term periods.
Disability Insurance Coverage
- Temporary, Partial, Permanent, or Total Disability.
- Insurance company usually waiver of premium.
- In case of disability due to accident, policyholder will receive 125% of the amount insured.
- A monthly income benefit is offered against lost income.
Regulations for vehicle vary country to country, however the importance to auto insurance remains the same. Vehicle Insurance is mandatory by law in many of the countries. There are chances that you may be encounter a large fine or assuming it is damaged in an accident and you are struggling to pay for repairs, as it is a one of the most valuable assets for you. Insurance policies are slightly costlier, as it covers all the risk associated with your motor insurance. It is categorized under general insurance which cover your financial risk towards vehicle from losses.
Auto Insurance Coverage
- Vehicle from loss of theft, fire, damages, accidents, or any other natural calamities.
- Bodily injuries to yourself or a passenger on your vehicle are also covered.
- Damaging property or injuries to someone with your vehicle, no need to worry for damage liabilities.
You can say everything you required are covered under auto insurance when you’re driving your vehicle.
Homeowners insurance actually protect against the risk like damages to your home due to man made disasters, natural calamities or perhaps any another threats. It not only covers risk towards home, but also your valuables things inside your home. Homeowners insurance is very important because property is your valuable asset of your life.
Homeowners Insurance Coverage
- Loss due to fire, flood, earthquakes, theft, burglary and sabotage.
- Loss due to other structures, lightning, smoke, explosions, burst pipes, weight of snow.
- Loss of personal property, personal liability, loss-of-use, medical payments and more.
Fire insurance covers risk to your property and goods due to fire. Such type of insurance, takes care of this expenses of livelihood that has been impacted due to fire. Some of the common fire insurance types are: Floating policy, Specific policy, Comprehensive policy, Valued policy and more.
Fire Insurance Coverage
- Covers reconstruction or repair expenses of insured property structures.
- Covers reconstruction or repair expenses of surrounding other structures.
- Harm, injuries caused to third party home or other property due to fire.
- Any temporary lodge to stay and also food expenses during evacuation during fire.
- It protects your liabilities against any lawsuits or associated damages.
Travel insurance covers financial risk associated with life, health and non-health emergencies during your travel to any other location. Broadly there are two travel insurance types. They are: Single Travel policy and Yearly Multi Travel policy.
Travel Insurance Coverage
- Loss of Luggage, passport, hijacking, delayed flights.
- Healthcare expenses, emergency expenses, accidental death.
Other Important Insurance Types
Above are all the important types of insurance. Apart from all these mentioned, you will have question like how many types of insurance polices more are available. Then let me tell you, there are other insurance types specific for specific sector or individual. In-case you are interested you can read more about some of the below types:
- Aviation Insurance
- Accident Insurance
- Builder’s Risk Insurance
- Bond Insurance
- Casualty Insurance
- Important Disease Insurance
- Financing Insurance
- Cyber Insurance
- Flood Insurance
- Earthquake Insurance
- Group Insurance
- Deposit Insurance
- GAP Insurance
- Income Protection Insurance
- Interest Rate Insurance
- Liability Insurance
- Legal Expenses Insurance
- Mutual Insurance
- Rent Guarantee Insurance
- Satellite Insurance
- Shipping Insurance
- Terrorism Insurance
- Wage Insurance
- War Risk Insurance
This covers most of the answers on how many types of insurance which you can think to protect yourself against any financial risk. Hope you would have gain a good knowledge on this topic. You can do more specific research in depth in-case you are interest in any of the about insurance types.