By grouping risks according to their focus, insurance
companies create insurance policies. This provides a measure of consistency in
the risks that are covered by a type of policy, which consecutively allows
insurers to look forward to their potential losses and set premiums
accordingly.
Life, health, automobile, homeowners' and renters', personal
property, fire, and casualty, marine, and inland marine policies are the most
common forms of insurance policies.
Life Insurance
Upon the death of the insured, life insurance provides
financial benefits to a selected person. Life insurance of many kinds are
issued. Some provide for payment only upon the death of the insured; others
allow an insured to collect proceeds before death.
For the benefit of a third person or persons, a person may
purchase life insurance on her or his own life. Individuals may even pay for
the life insurance on the life of another person.
For example, upon the death
of her husband, a wife may purchase life insurance that will provide benefits
to her. This policy is commonly obtained by spouses and by parents insuring
themselves against the child death.
However, when there are practical grounds to believe that
they can expect some benefit from the continued life of the insured, individuals
may only purchase life insurance on the life of another person and name
themselves beneficiary.
This means that some household or financial
relationship must unite the beneficiary and the insured. For instance, in the
hope that the stranger will go through a fatal accident, a person cannot
purchase life insurance on the life of a stranger.
Health Insurance
Following areas will include the coverage for the health
insurance.
Permanent Coverage: Different from
employer-provided health insurance that terminates when the person change jobs,
the person and members of the family can keep the individual or family policy providing
the person choose to pay the premium.
Sickness Protection: Due to illness or claims
history, in many states, individual or family health insurance policies
generally cannot be cancelled or premiums considerably increased.
That's why it
is vital for you to get health insurance coverage, now, before you or a family
member develop an expensive medical condition.
Financial Protection: Unpredicted health
expenses are the single largest reason U.S.
families file bankruptcy. Each year, more than 1 million face such types of
problems. To avoid having a medical problem become a financial catastrophe,
Everyone should have health insurance.
Accidents: Even healthy people can be involved
in an accident, or contract an illness.
Saving Money: When compared with participating
in a group plan from your employer, policies for healthy individuals or
families are typically less expensive.
Spouse/Dependents: Even if you receive free
health insurance at work, it may be less expensive to get your dependents their
own policy instead of let them take part in the group plan from your employer.
New Tax Advantages: For individual/family
health insurance, self-employed individuals are now allowed to deduct 100% of
the premium from their taxable income.
Auto Insurance
Liability insurance is contained by all automobile insurance
policies, which is insurance against injury to another person or against harm
to another person's vehicle caused by the insured's vehicle. Auto insurance may
also pay for the loss of or damage to, the insured's motor vehicle.
At a minimum, most states require that all drivers carry liability
insurance under a no-fault scheme. The insurers pay for damages resulting from
an accident in states recognizing no-fault insurance, and to settle the issue
of damages, the drivers do not have to go to court.
Only in cases of egregious
conduct, drivers in these states may sue over an accident only, or where
medical or repair costs surpass an amount defined by statute.
Given below are the different points on which auto Insurance
is based:
Personal Injury
Protection (PIP) is analogous to medical payments coverage, only it
usually covers a broader range of events, along with medical bills, lost wages,
loss of services, etc.
Uninsured Motorist
Coverage policy covers the injury cost or damage caused by another
driver who is not insured. It covers the policyholder, authorized drivers, and
any passengers. For bodily injury and property damage, it usually consists of
separate limits. In some states, this policy is required.
Collision Coverage:
If your car is damaged in an accident caused by you or an authorized driver, Collision Coverage policy helps to pay for repairs or
fair market replacement cost. This policy is always optional.
Comprehensive Coverage:
Comprehensive policy covers the cost of repairs to or replacement of your
vehicle should it be stolen, damaged, struck in a hit-and-run, or damaged by an
"act of God."
From policy to policy, covered events vary from policy
to policy but usually comprise fire, flood, and falling objects. This policy is
always optional.
Liability coverage
insures you against the cost of injury and damage you cause to another in an
automobile accident. It is made up of two policies like bodily injury liability
and property damage liability.
In virtually every state, auto liability
insurance is required. Depending upon the place of living, purchasing types and
coverage, auto insurance regulations vary greatly from state to state.
Bodily Injury Coverage
is the part of liability coverage that insures you against the
injury you cause to others in an auto accident. It comprises of two figures.
One confines the cost of injury coverage per person injured, and the second confines
the total dollar amount of injury coverage (for everyone injured.) This is a
very important policy.
Property damage
coverage is the part of liability coverage in an automobile accident
that insures you against the cost of damage to another's property caused by
you. Here "Property" includes other cars, houses, fences, telephone
poles, etc.
Medical payment
coverage pays the medical bills of the covered driver, family
members, and passengers when injured in an accident, irrespective of who was in
the wrong. This coverage is required in some states, but not in others.
Travel Insurance
In most parts of the US,
medical care is excellent, but for cases of critical illness, it can be very
expensive and even astronomical. To avoid the staggering costs that might
result from serious sickness or injury on trips, many travelers purchase
supplementary international medical insurance or travel insurance.
Travel insurance takes the shape of following types:
Many people are familiar with flight accident insurance,
which pays a huge sum of money if you are killed or seriously injured in an air
accident. While traveling, this type of insurance policy usually does not cover
any medical expenses resulting from illness or other types of accidents.
Travel protection plans or trip cancellation insurance are
offered by travel agencies frequently. These usually cover the cost of travel
expenses should you be forced to cancel your vacation because of accident,
illness or certain other causes.
They often cover travel assistance services,
protection for lost or damaged baggage and limited medical coverage. For
covered medical expenses, there may or may not be a deductible or co-pay.
Homeowners' Insurance
From losses related to their dwelling, including damage to
the dwelling, personal liability for injury to visitors; and loss of, or damage
to, property in and around the dwelling, homeowners' insurance protects
homeowners. For persons who live in rented dwellings, renters' insurance covers
many of the same risks.
Personal Property Insurance
Personal property insurance protects against the loss of, or
damage to, certain items of personal property. When the liability limit on a
homeowner's policy does not cover the value of a particular item or items, it
is useful.
For example, in addition to a homeowner's policy, the owner of an
original painting by Pablo Picasso may wish to obtain a separate personal
property policy to insure against loss of, or damage to, the painting.
With fire and casualty insurance policies, businesses can
insure against damage and liability to others.
Fire insurance policies cover damage caused by fire,
explosion, earthquake, lightning, water, wind, rain, collision, and riot.
By means of a variety of losses, casualty insurance protects
the insured together with those related to legal liability, burglary and theft,
accident, property damage, injury to workers, and insurance on credit extended
to others.
Temporary, specialized forms of casualty insurance are the Fidelity
and surety bonds are. A fidelity bond insures against losses associated with
the dishonesty of employees, and a surety bond provides protection to a
business if it fails to accomplish its contractual obligations.
Marine Insurance
Marine insurance policies insure transporters and owners of
cargo shipped on an ocean, a sea, or a navigable waterway. Marine risks include
damage to cargo, damage to the vessel, and injuries to passengers.
Inland marine insurance is used for the transportation of
goods on land and on landlocked lakes.
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