Types of Insurance

Insurance coverage is an essential element of any sound financial plan. It is a way to balance financial risk. People use insurance to provide financial protection in case they suffer an event that threatens their financial stability in the future. People in insurance careers serve very important roles in helping families stay on a sound financial footing.

In short, insurance protects what you care about. This is one of the things that make insurance careers so compelling. Most people work hard for the assets they acquire, and to lose those assets would be disruptive to their lives. Because insurance is a hedge against financial consequences of an unknown event in the future, it is easy to understand why there are so many different types available in the market.

The following is a brief overview of the most common insurance coverages for individuals. Within each category of insurance, there are many variations and features available.

  • Life insurance can replace the financial contributions you make to your family in the event that you die. Your beneficiaries receive the proceeds of your insurance policy. Many employers provide life insurance as an employee benefit, but individuals can supplement the benefit amounts on their own. In fact, much of the income of the average insurance agent results from providing a term life insurance quote to individuals.
  • Health insurance helps you contain the financial burden associated with seeking medical treatments for illnesses, injuries, or other medical conditions. Health coverage is provided by many employers and comes in many different forms. Other health-related insurances that are commonly purchased by individuals or their employers include vision and dental insurance.
  • Automobile insurance is required in many states. It protects you from liability you may incure while operating your motor vehicle. It also protects you against damage done to you or your automobile by others.
  • Homeowner's insurance protects you financially from damage to your home and the personal property within your home. Homeowner's insurance typically covers losses from events such as fire, theft, some natural disasters, or acts of terrorism. In some locations, coverage for floods, earthquakes, and tornados are purchased separately. Banks typically require proof of homeowner's insurance before making a loan against the property.
  • Much like homeowner's purchase, renters insurance protects you in the event you suffer damage to your personal belongings while you reside in rental property. Most policies insure furniture, electronics and other household goods against natural disasters, acts of terrorism, or theft.
  • As people continue to live longer lives, long-term care insurance is gaining in appeal. Long-term care insurance provides coverage for chronically ill individuals. Some of the expenses covered typically include the cost of visiting nurses, nursing homes, caregivers, and therapy.
  • Disability income protection is sometimes called the most overlooked insurance on the market. Disability insurance protects your ability to earn income if you suffer from an accident or serious illness that prevents you from working in your normal profession.
  • Types of Insurance
  • Pet owners can compare pet insurance to offset the costs associated with obtaining medical care for their pets.
  • If you are unsure whether the trip you scheduled will actually take place, you might want to consider travel insurance. Travel insurance typically provides financial remuneration if you have to cancel or interrupt your trip, or if your baggage is stolen or lost in transit.
  • Liability insurance provides you with financial protection if another person, or a third party, seeks damages from you.

In addition to the aforementioned insurance protections, there are numerous specialty insurances. These insurances appeal to people in certain vocations, or people who have particular hobbies or concerns. A few examples include boat, aviation, credit card protection, identity theft, accidental death, and kidnapping and ransom insurance. In addition, there are a number of insurance coverages available for businesses and business owners. Some business-related insurances are product liability, professional liability, commercial property insurance, and workers compensation.

Last Updated: 05/21/2014

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