Insurance and Us

Every once in a while something happens when we wish that we had some sort of coverage available against the loss. We have all heard the word “Insurance” at least once in our life. However, not all of us know the exact meaning of Insurance and its importance in our life. Insurance is defined as “the state or means of being insured”. In this process there is usually a company involved who signs a contract with a party. According to this contract the party pays a premium to the company and in case of specified loss, the company will cover it at a particular or agreed upon rate.

With the passage of time new types of insurances have been emerging. Some of worth mentioning types are Home Insurance, Health Insurance, Life Insurance, Auto Insurance and Disability Insurance. These are explained one by one as under

1. Home Insurance: One of the most common threats we face now a days is to our homes. For this reason more and more people are opting for home insurance. In business industry it is also known as hazard insurance or homeowners insurance. This covers damage to private property like homes, its items, living expenses or other related personal possessions of the owner. The policy holder can also customize the policy to cover any accidents.

2. Health Insurance: This insurance takes effect when Health Services like NHS in UK or other such public health services do not cover the cost of private medical treatments. This way the insurer can ensure that he will get better treatment then the public services offer. These type of insurances are meant for those who are not covered for health insurance by there companies, are self-employed or work as a freelance.

3. Life Insurance: This insurance comes in effect after the death of the policy holder. The main aim of this type of insurance is to provide monetary benefits to the decedents in case of death of policy holder. Life insurance can also be customized to specifically cover the deceased’s final expenses like burial, funeral or other such expenses. Another advantage that the life insurance policy holder has is decided how he wants his family to benefit from the insurance after his death. There are two options that he can choose between; he can either ensure that the amount is paid in a lump sum or as an annuity. In case of annuities, the decedents are paid an annual amount.

4. Auto Insurance: In UK this is also known as Motor Insurance. According to this insurance the insurer can claim legal coverage for both the driver and the insured vehicle in case of an accident. Through out US, it is necessary to have the vehicle insured before it is allowed to operate on a public road.

5. Disability Insurance: This insurance is applicable in case when an insurer is unable to continue to work in case the policy holder faces such illness or injury that prevents him from working. Having an Insurance policy is very important but it must be kept in mind that each insurance policy has its own importance and purpose.

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