7 Types of Insurance

7-types-of-insurance

Regardless of who you are or what you do, life always happens. Sometimes you’re lucky enough to see the signs and initiate steps to avoid them, but in most cases, you won’t. However, taking steps to prevent mishaps regardless of whether you see them coming or not, is crucial. That is where Insurance comes in.

What Is Insurance?

Insurance is a contract of compensation between an insurance company (insurer) and the individual (insured). This legal agreement binds the insurance company to make good of the losses of the insured when the unexpected happens. On the other hand, the insured is required to make periodic premium payments either regularly in return to become eligible to lay a claim on the insurer. 

Insurance can cover almost any risk of a potential loss. However, some types of Insurance are the most common in most parts of the world highlighted below.

What are the types of Insurance?

1. Life Insurance

This contract offers the insured financial compensation in case of any death, accidents or disability. Some life insurance policies even provide coverage for retirement (annuity). Payment to the insurer to provide cover for this kind of coverage is also periodic and flexible 

2. Vehicle Insurance

This insurance policy protects you against the cost of physical damages that could arise from accidents involving your vehicle. It could also offer financial compensation against theft, damages to third-party vehicles or properties or injuries as a result of natural disasters. 

3. Home Insurance

The Home Insurance provides liability coverage against accidents or items of valuables in the home. This type of Insurance compensates you for loss or damage to your home or valuables within them as a result of incidents such as fire outbreak, theft, etc.. 

4. Health Insurance

The Health Insurance policy covers the cost of medical expenses incurred by the insured. It is managed by health insurers which require the insured to receive treatment from a network of designated healthcare providers. If they seek care outside the network, in most cases, the insurance company may cover the expenses incurred.

Most companies also use it as a means of attracting quality employees. In this case, the cost of Insurance is shared between the employer and the employee. 

5. Education Insurance

This insurance plan secures a child’s education in case of the unfortunate loss of the child’s sponsors (who are usually the child’s parent(s)). The funds will be used to pay their tuition, hostel fee and other expenses. Under this plan, the child’s future of education is guaranteed, while the parents or guardian is the plan owner.

6. Travel Insurance

This insurance plan protects the insured from the risks associated with travelling. These risks could range from baggage losses, cancelled trips, illness or injuries sustained during the trip. 

7. Fire Insurance

Fire insurance is a type of property/home insurance that covers damage and losses solely caused by fire. The purchase of fire insurance policy helps to cover the cost of replacement, repair, or reconstruction of properties as a result of a fire outbreak.

Conclusion 

As a result of technological advancement, it has become more convenient to buy an insurance policy. You can do this by merely researching local listings of insurance companies in your country to find an insurance company and a plan that works best for you. 

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