Insurance is a type of financial protection that protects a person from any misfortune. In the case of an accident, the person is paid a certain amount, so that the person does not face any financial burden.
Insurance is a promise made between two individuals, a selling company (INSURER) and a buyer (INSURED), which comes into play when the insured is at risk.
There can be many types of insurance, such as health insurance, travel insurance, motor insurance, life insurance, etc. One can avail of this type of insurance and protect itself from the financial loss of disaster.
We can claim insurance as a tool in risk management. When, due to natural disasters or unexpected events, people suffer from problems like health problems or property related problems. Insurance comes during that period to reduce risk in financial terms. Indeed, the risk can be significant, but we can reduce the risk slightly with financial support. That is the primary objective of insurance.
In insurance, there are mainly two types. They are 1) life insurance, 2) general insurance.
Life insurance is an arrangement between an insurer and the insured, where the insurer promises to pay an amount to a specified beneficiary in exchange for a premium upon the death of the insured.
General insurance covers property insurance against burglary, theft, and fire, etc. such as accident insurance and health insurance.
- A) Fire Insurance
- B) Motor Insurance
- C) Marine Insurance
- D) Accident Insurance
- E) Burglary Insurance
- F) Health insurance is a form of general insurance.
Benefits of insurance
Most insurance policies are designed to cover risk only. For example, health insurance covers the risk of future accidents and subsequent hospitalizations, and auto insurance will cover your costs in case of a car accident.
Financial coverage for your family if you die– Whole life and term insurance plans provide lump-sum coverage to your relatives in the event of your death.
Reduction on your tax liability– A similar benefit to life and health insurance policies is that the premium is excluded from your net taxable income, thus you will have to reduce the amount paid in taxes.
Here are the standard policies
Health / Medical Insurance– You need health insurance to cover your medical and hospitalization expenses.
Car Insurance– You must have car insurance before legally driving your vehicle. Car insurance covers your car and other cars that could have been damaged in the accident.
Whole Life Insurance– It provides insurance coverage for the entire life of the policyholder.
Disability Insurance- If you are physically temporarily or permanently disabled, disability insurance helps you replace lost income.
Mortgage insurance– If you want a mortgage, you will need to get mortgage insurance to protect you from the possibility of an inability to repay the loan.
Property Insurance– You needs property insurance to protect your property from the risk of damage or damage due to theft, fire, or natural disasters.
