Insurance. Here is what you need to know Insurance refers to a contract where one party pays money to another to be covered against any unexpected calamities. When a calamity occurs to insured, he or she is compensated by the insurer. The insured pays money either monthly or yearly to the insurer to cover them against any type of loss. In life there always probabilities of unexpected events happening and may plunge one into a financial crisis. It’s always important to be covered against such unexpected losses. There are many types of insurance policies one can opt to insure themselves against. Among them, the major ones are discussed below.
1. Life insurance.
This is a type of cover in which an individual takes to cover his or her family and loved ones in case unexpected death happens. This insurance will provide a financial benefit to the designated beneficiary. It will provide money to cover burial, funerals and other final expenses. The beneficiaries are paid in an annuity form.
2. Property insurance.
This is another type of cover an individual takes to cover their properties against risks such as fire, theft, damage and other natural calamities like earthquakes and floods. Important types of property insurance include; home insurance, flood insurance, earthquake insurance and inland marine insurance. When unexpected losses affect the insured’s property, the insurer will compensate the damages and losses incurred.
3. Health insurance.
This type of insurance will cover the insured against illness, accidents, injuries and even loss of life. The policy will cover costs incurred by the insured during treatment and use of the hospital facilities during the time of treatment
4. Insurance against disabilities.
This type of insurance is for persons who are disabled and those who have lost their major body parts during accidents. Insurance policies related to disabilities include; disability insurance, long-term disability insurance, disability overhead insurance and total permanent disability insurance.
5. Motor insurance.
This type of insurance covers your vehicle(s) against accidents and other problems it may encounter while on the road. When your car is damaged as result of an accident, the insurer will compensate the damages and you will have your car hitting the road again. There are two types of motor insurance; one which covers an act of liability and the other one covers all the liabilities and damages.
6. Credit insurance.
This type of insurance policy will take care of the borrower’s loan in case of unemployment, disability or death. Basically, it covers repayment of credit in case the borrower is unable to repay. Examples of these covers include; mortgage insurance and trade credit insurance.
7. Travel insurance.
This type of policy basically covers against unexpected events occurring during traveling. It includes cover against loss of luggage and baggage, medical losses, accidents etc.
8. Liability insurance.
This type of insurance covers the negligence of the insured. However, this type of policy will not cover the intentional acts of the insured.