There are many different types of insurance available to individuals. All of which have separate uses. As of now, according to noexam.com, 60% of the population of the United States have life insurance out of which 45% have individual life insurance, 33% have group insurance, and 22% have both individual and group life insurance. As the name suggests, life insurance insures the life of a human being.
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How does life insurance work?
Life insurance is a contract between an individual and an insurance company. In the deal, an individual agrees to pay the insurance company a sum of money agreed upon at the time of signing the contract. This amount is to be given regularly, also agreed upon at the time of the contract signing.
When signing up for life insurance, an individual will have to choose beneficiaries, people who can access or receive the life insurance in case of an accident, premature death, or other. In the case of the “death” of an individual, the beneficiaries can claim life insurance. It can be beneficial if an individual has a family, partner, or children, especially if the individual’s family is dependent on their income and support.
Life insurance companies can ask particular questions such as medical history, travel history, hobbies, and other data which can include any information about risky habits and life-threatening scenarios an individual may be put in.
Property Insurance
Property insurance, as the name suggests, is insurance that an individual can get to keep their property safe. It may even include protection and liability coverage, reimbursement in case of an accident, or also insuring of things such as mobile phones and laptops.
Property insurance can ensure that property owners of being protected from damage, theft, or even weather hazards. Most property insurance policies will include protection from theft, vandalism, road accidents, fire, rain, extreme weather conditions, water damage, and even electrical damage, such as short-circuiting.
In several ways, an appeal for property insurance includes payment via replacing of the items with those of equal value, giving the individual the payment in cash of a comparable amount of the damaged/ lost property, and can include the reparation of damaged property in place of payment.
Social Insurance
Social Insurance is what an individual gets from the state. Forbes explains social insurance as “programs intended to provide benefits to the general population, or specifically the working population, typically funded by similarly universal payroll taxes.”
A better way to understand social insurance is taxes the government collects proceeds towards specific people in need. For example, people who have worked their whole lives pay taxes, and when it comes time for them to retire, they are eligible to receive old-age pensions.
Other social insurance examples include benefits for people who are seeking employment but can not find any, known as unemployment benefits; individuals who can not work due to health or disability issues, called disability or sickness benefits.
This form of insurance is what society pays in taxes that help the rest of the general population. It is hugely beneficial for individuals as well as guarantees that every single citizen is entitled to benefits in case of emergency, retirement, or other.
Guarantee Insurance
Business can be full of risks. Especially when it comes to start-ups or entering into new ventures and unchartered territory. Guarantee insurance is a signing of a contract between an individual, or a group of individuals, and someone loaning financial necessities.
When it comes to a risky move, an individual providing a loan will be more likely to enter into a dangerous agreement if there is a guarantee to be repaid in due time. It is where guarantee insurance comes in. Guarantee insurance provides a pledge that the money lent will be returned in full.
The contract may include specific clauses, such as one that states that a piece of property will stay cited in the guarantee. Meaning, if the loan is not returned the individual to who the money is lent will have access to the property that is of equal or higher value than the investment. In the case of no repayment, they will become owners of said property and can sell it as a repayment of the loan.
Marine Insurance
Marine insurance is essential for those who have ships, boats, or businesses that ship items via water channels.
Marine insurance is especially crucial for those who ship cargo as there is no guarantee of water conditions when out at sea. EFU General Insurance Ltd states “Marine insurance is said to be the Mother of all Insurances.”
This kind of insurance covers the storage of goods from one warehouse to the next. It also includes the protection of products transported to different locations around the world.
Liability Insurance
An easy way to explain liability insurance is the “protection against claims resulting from injuries and damage to people and property.“
Liability insurance is also known as third-party insurance. This kind of coverage is vital for those who can be responsible for damages to other people’s property or other people in general. It can include bus drivers, chauffeurs, doctors, or dentists.
Liability insurance is a way to protect an individual, company, business, or organization in case of different reasons such as:
- Damage caused by a product made by a company
- Damage or accidents which can take place in a place of work;
- An injury caused to an employee;
- In case of death during an operation.
Fire Insurance
2016 saw 1,342,000 reports of fires in the United States of America alone. 2016 also had 2,950 deaths reported due to fires and fires alone. $7.9 billion was reported in property damage due to fires. Out of these, 173,000 were fires caused in or by vehicles.
These statistics come from the National Fire Protection Association. Their data also shows that the United States fire department responds to a fire somewhere in the country every twenty-four seconds.
Fires can cause a lot of damage and suffering. They can appear unexpected, and sudden, and can be extremely difficult to contain if not appropriately handled. Many people do not even have proper fire management systems in their homes in case of emergencies.
Fire insurance includes the signing of a contract that can state that in case of injuries, loss, death, or other damage caused by a fire, the recipient of the insurance will cover an agreed-upon amount.
While there are many causes for fires, there are also many people who initiate fires themselves. Some of the biggest insurance frauds have been via the setting of fire by individuals who are looking to claim their insurance on fire damage.
This is why one of the main factors of any fire insurance policy is that the fire must be an accident, and not started or initiated on purpose. Fires caused by individuals on mission can lead to significant lawsuit issues, which can cause a lot more financial damage.
There are many different insurance policies available to individuals, and it can be hard to decide which one is necessary. However, with a little bit of research, it becomes easy to understand who requires insurance and what kind!
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