Every day people take risks. They take risks when they visit a new country, drive their vehicle to and from work, when they get a flu-bug from being among the public, when they walk down the street, and the list goes on and on. This is one of the main reasons why people require the security of insurance. Insurance comes in two broad types, including general insurance and life insurance.
Life insurance, within itself, has many different types of insurance policies that provide financial compensation in case of disability or death. There are specific life insurance policies that will even provide financial compensation after a specific period of time or retirement. Basically, life insurance provides security and protection in case of death or serious injury.
The two different ways to purchase a life insurance policy is either by making periodic payments or a lump sum payment. These type of payments are commonly known as premiums. In exchange for your premiums, an insurance company will promise to pay an agreed amount to your beneficiary in case of disability or death. A life insurance policy can also benefit and support individuals after retirement.
The different types of life insurance policies include whole life insurance, term insurance, unit linked insurance plans, money back policies, endowment policies, pension plans, and child plans.
For example, a term life insurance policy is the most popular type of insurance. It will provide insurance for a specific period of time. In the case of death, the beneficiary of the policy will receive a lump sum. However, if the insured person survives the term of the policy then no money will be given to the family or to the insured.
A general insurance policy is a type of contract that will provide financial compensation on other things besides death or disability. A general insurance policy can compensate a person for financial loss due to various liabilities related to your vehicle, health, home, travel, and so forth.
An insurance company will provide you with a specified amount to cover damages due to things like theft, fire, travel disruptions, disasters, or whatever.
General insurance is often purchased for five key reasons and these types include fire insurance, home insurance, travel insurance, motor vehicle insurance, and health insurance.
For instance, health insurance is a type of general insurance that will cover the cost of medical care. It will provide you with a predetermined amount towards the treatment of an illness or any injury. It will cover things such as the treatment of critical illnesses, day care procedures in the hospital, medical bills prior to or after hospitalization, and most hospitalization costs.
As mentioned previously, insurance is broken down into 2 basic groups, life insurance and general insurance. However, within these two basic groups you will find a variety of subcategories. You will even find different types of insurances within the subcategories.
The best way to determine which type of insurance you require is to either talk to a reputable and knowledgeable insurance agent or to go online and research the information from an online insurance company.