Various Types of Insurance!

Insurance is a way to provide a hedge against financial loss of very different situations. For example, life insurance (LI) to help compensate for the loss of income and family if a parent dies work. Health Insurance (HI) to help pay medical expenses. Fire insurance pays all or part of the loss if the house is a house destroyed by fire. People can also buy insurance to cover unusual types of economic loss. Insurance is the principle of shared losses. People who want certain types of insured losses agree to make regular payments called premiums to the insurance company. Conversely, these people get the contract, called the company’s policy.

The amount paid by insurance to policyholders is known as the profit or benefit claims. The insurer uses the premiums to invest in stocks, bonds, mortgages, government securities and other income generating companies. The company pays a dividend of premiums it collects premiums and investment income earned. Insurance works because the policyholders are willing to trade a small degree of loss – the premiums – to ensure they are paid in the event of major disaster. They may own property, drive, operate a business, and participate in other activities without worrying about the finances, which may arise.

There are three main types of L.I.: Term L.I., Whole L.I., and Endowment L.I., and the many companies sell these policies which combine these three basic types of insurance. Term life insurance provides benefits only if the insured dies within the period covered by the policy. Whole life insurance provides life insurance coverage. Endowment life insurance is similar Life Insurances; pays the nominal value of the insured deceased. However, endowment is mainly a method of saving money and policy holders mostly use endowment policies for the betterment of their children like funding their education etc.

Health insurance is undertaken to pay all or part of the costs of hospitalization, surgery, laboratory tests, drugs and other medical care. Increase in medical care has increased the need for adequate health insurance. People without coverage could cause serious financial difficulties if there is a serious illness or accident. Private health insurance sells insurance for individual and groups. Most people are covered by individual plan of group health insurance where they work. The group plans may also cover the family of the insured. Group health insurance usually costs less than individual coverage because of administrative and other costs are lower.

Individual health insurance is provided primarily by insurance companies, plans for medical services, health care organizations and employers. Many insurers who sell health insurance policies also provide financial assistance to the insured person. A cash benefit is a fixed amount for each medical expense or each hospitalization. If cash payments do not cover the full cost of medical care, the insured must pay the balance. Individual health insurers offer four main types of health insurance. They have hospital insurance, surgical expense insurance, insurance costs and large ambulatory health insurance costs. Insurance has its own advantage and benefit; it is all about choosing the right one to suit your requirements.

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