What is Insurance and Types of Insurance


Insurance is a legal contract between you and an Insurance Company, by which the company will compensate you for any losses you incur during the period of the contract and you will make the payment called premiums to the insurer for this service.


Why do you need insurance? The most obvious reason is to get the finance that’s required to manage losses or damages incurred under unforeseen circumstances. The financial compensation can be very helpful in such times and that’s why insurance becomes so important in your everyday life. There are many different types of insurance. Here’s a brief look at what these are: –

Life Insurance – This type of insurance protects family members from losses occurring in the event of the death of the policyholder. It’s a policy that most people are seen to take during their lifetime.

Car insurance – This insurance is taken on the car and protects the car owner against losses occurring due to damages occurring on the car as well as the bodily harm caused by accident.

Private medical insurance This insurance provides coverage from expenses incurred during a short-term illness or injury that is curable. It helps people to get immediate treatment for their illness rather than have to wait on an NHS waiting list.

Travel insurance – This kind of insurance is increasingly taken by many people as travelling can be dangerous and there can be unexpected medical expenses during a journey. Such expenses can be quite costly and taking travel insurance can be a real lifesaver under such circumstances.

Critical illness insurance Under this insurance type, you receive coverage for any critical illness that may occur in the latter part of your life, by which you may not be able to work any longer. It helps to protect your loved ones, under such trying circumstances.

Home insurance This insurance type provides coverage if your home is damaged as a result of unforeseen circumstances such as floods, thefts, fire and so on.

Pet insurance – This type of insurance protects you against in the event you have to pay a huge bill to cover for your pet’s medical insurance.

Whatever, be the type of insurance you take, ensure that you read up on all the details of the policy, and the items for which you get coverage so that you know how you are going to get compensated if the need arises.

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About the Author: Alex Johnson

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