Insurance is a contractual agreement between two parties, where one entity receives reimbursement against the losses he suffers by the other party referred to as the insurer. The insured party pays regular payments to the insurer, called premiums. He or she transfers the risk to the insurer; and in return receives a promise to be indemnified in case of a financial loss.
Upon the agreement between the insurer and the insured, the latter receives a contract, commonly referred as the insurance policy. The contract details the circumstances and details under which the insured will be compensated which is binding to the two parties. Quantifiable risks can potentially be insured and an insurance policy will set out the specific perils that are insured under the coverage and which are not.
There are different types of insurance policies catering to the different needs of society. Different insurance companies offer different and diverse coverage with others specializing with a single line of risk in a given area.
The following below are different types of insurance policies that are available:
This, out of the many types of insurance, is an insurance that cover and protects the policy holder against financial loss that would result from an accident involving a vehicle he or she owns. The policy extends typically to 3 categories:
A.) Medical Coverage – This covers the cost of treating injuries, rehabilitation, funeral expenses, or lost wages.
B.) Liability Coverage – This deals with any legal responsibility that the policy holder has on others for property or bodily injury.
C.) Property Damage – This covers any damage or theft of the car or other asset.
Amongst the different types of insurance policies, this insurance policy provides monetary benefits to the beneficiary of the deceased since the insurer cannot indemnify the life of the deceased. The compensation could provide income to the bereaved family or meet burial and other final expenses which can be paid either in annuities or in lumps of cash payment.
Below are the different types of life insurance policies:
A.) Whole Life Policy
B.) Limited Payment Life Policy
C.) Endowment Policy
D.) Double Endowment Policy
E.) Convertible Whole Life Policy
This insurance policy covers the cost of medical treatment of the policy holder. It is among the most important and sought after policy, mainly by employers who provide health insurance coverage to their full-time and sometimes part-time employees.
Property Insurance, offers protection against risks to property owners and reimburses the owner of a structure and it's contents in the event of theft or damage. This insurance policy is a broad category of other subtypes of insurance which include:
A.) Home Insurance – Provides coverage for destruction or damage of the policy holders home.
B.) Marine Insurance and Marine Cargo Insurance – covers the damage or loss of vessels at sea and the cargo while in transit.
C.) Aviation Insurance – Covers aircraft and related third party liabilities.
D.) Fidelity bond – This covers the policy holders for financial losses suffered as a result of fraudulent acts by specified individuals. Ex: employees.
This insurance policy seeks to cover the insured against legal claims they are charged with. It provides a two fold protection to the policyholders: a legal defense in case of a law suit against him and payments on behalf of the insured with respect to a court verdict.