Insurance can be termed as a contract amid a company providing the services of insurance and its clients who are seeking services. Both parties are agreeing on the happening of certain events that may take place resulting in any loss for the client and the insurance company will compensate its clients for the loss. The compensation of loss is always in terms of monetization. For instance when the car insurance company is offering the auto insurance, the company is agreeing that in case of an accident or any damage to the car, the company will provide the clients its repairing amount. The insurance providing company is agreeing under the income protection policy that in case if client is unable to work, the company will be paying the client its agreed amount only. There different types of insurance policies each having its pros and cons.

What is insurance
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The reason why the insurance policies are known as the special type of contracts is because of its certain characteristic that are relating the insurance policies that are not related to the most of the other contracts. Particularly, the insurance policies are the contracts of the good faith which means that the insurance company and its clients are having important obligations that are not existing in the casual contracts. Such duties comprises of the disclosure duty and the duty not to make any sort of fake statements in order to have a claim. This is because the insurance companies can refuse you to pay the claim in case the company is not satisfied with the material that the client has presented to have a claim.

What are the types of insurance?

There are numerous types of insurance policies, each having its specific significances. Some of the most widely used insurance policies and their types are explained in detail below.

1. Health Insurance

The health insurance policy is one which is providing the cover of health to you and your family from certain bodily injury or medical contingency. It is a fact that every human being is exposed to health hazards and medical emergency can strike at any instance without any signs. There are numerous reasons to have a health insurance such as the medicines are becoming expensive over the years. The private hospitals are becoming expensive with each passing day and the diagnostic charges are getting high beyond the reach of a common man. Moreover, the specialists have high consultation fee.

The following are the major types of health insurance explained in detail.

a) Preferred Provider Organization Health Insurance

The PPO plan is the one encouraging you to have the use of the network of the most preferred doctors and medical centers. The providers are contracted for the deliverance of services to the members with a planned discounted and negotiated rates. The clients are generally not required to designate any primary care physician but the ultimate choice is of specialists and doctors within the plan network. With the PPO the services rendered outside the network might be resulting in the out of pocket costs. The PPO is a good choice if you are in need to have flexibility in choosing the physicians and like the balance of provider verses lower premiums.

b) Health Maintenance Organization Health Insurance

The HMO is all about having a lower out of pocket expense and having the flexibility to have the choice of hospitals and physicians. The HMO are the requirement to have a primary care physician who will take care of the medical needs of the insurer. The HMO is best suited for those who are preferring lower premiums and like the trade off to have in network services.

c) Health Savings Account Health Insurance

The HSA is the health insurance account which is not actually an insurance plan. The HSA is the tax favored account which is used in the conjunction with the HSA compatible conductible health plan only to pay for the expenses of medical problems. HSA is a good option for the people who are having a desire to have a better control of how, when, and what to care and in seeking the balance in between the deductibles.

d) Point of Service Health Insurance

The POS is the plan to combine both HMO and PPO plans. The HMO and POS plans are having the requirements to choose the primary care physician. The point of service health insurance plan is best for you if you are in need to have flexibility in choosing the physicians and have a desire to have a balance amid choice and lower premiums.

2. Auto/ Car Insurance

The auto insurance is for the protection against any damage that might happen to your auto of any sort i.e. car, jeep, and truck etc. The contract is in between the insurance company and you. You are agreeing to pay a premium and the company is agreeing to compensate for the losses in any accident or damage to your auto. The property coverage is paying the damage for the auto or even theft of auto. The liability coverage is paying for the legal responsibility.

There are many types of auto insurance and the following are the major type of car insurance.

a) Liability Auto Insurance

The liability auto insurance is the coverage of the event in case of the accidents. The coverage is determined as the results of your actions. In case if the fault of the accident is because of you, the insurance company will offer you minimum payments while if the reason of the accident is the other party, the company will offer you entire payments for the repair of the car.

b) Collision Coverage

In case of the covered accident, collision coverage is liable to pay you for the repairs of the car. But in case if your car is totaled where the costs of the repairs are exceeding the entire value of the vehicle, the company is liable to pay you for the price of the car.

c) Comprehensive Coverage

The comprehensive coverage is the beyond the accidental coverage and is more related to the damage caused by weather, animals, and protests. The comprehensive car coverage is also of great use in case of the theft of the car. The company is then liable to pay you for the entire amount of the car.

3. Life Insurance

It is a fact that these days life is so uncertain and anything can happen to you right away. Therefore you have to make it sure that your family is secured in case any harm may happen to you. Life insurance is the best way to make it sure that your family is in no need of money from any source rather than the insurance company. The company is liable to pay an agreed amount to your family in case if you die. There are numerous types of life insurance but one thing is common in each policy that the company will pay your family for the compensation of your life. Some of the life insurance plans are including the health insurance as well while some are merely for the case if you die.

The following are the major life insurance types explained in detail.

a) Term Life Insurance

The term life insurance is the most basic life insurance and is the least expensive as well. The life insurance plan if often for the people of age below 50. The term life insurance is a well termed policy written for the specific instance of time typically ranging from a year to 10 years.

b) Whole Life Insurance

The whole life insurance is combining the permanent life protections with the saving component. The policy is till as long as you are able to pay the premiums. By the time when you are not able to pay for its premiums, you may lock it and have its fruit for your family after your death. As the policy is gaining value, the amount which you will receive at the end is also getting higher.

c) Universal Life Insurance

The universal life insurance is very similar to the whole life insurance with the added potential of higher earnings. The universal life insurance is having more flexibility in the regards of the premiums and the face value. The premiums may be increasing or decreasing or even deferred but the cash values are able to be withdrawn.

4. Home Insurance

The most important asset of your life is your home and you have to make it sure, it is safe no matter what happens. The home insurance is keeping your home safe from the earthquakes and floods which are too common these days. The natural disasters can happen anytime and man-made accidents are also not out of reach. Therefore, the home insurance is the best way to keep your home safe under the umbrella of an insurance company. The insurance company is liable to pay you for the compensation in case of any damage that may happen to your home.

The following are the major types of home insurance.

a) Building Insurance

The building insurance is all about the structure of the house and the policy is concerned with the premiums of its structure safety only. No one wants his/her house to be destructed in either manmade or natural disasters. Therefore the need of building insurance is of great importance. Most of the mortgage investors these days are insisting you to have the building insurance to have surety of your house.

b) Content Insurance

One of the other types of home insurance is the content insurance. The insurance policy is only concerned with the insurance of the contents of the house but not the building or structure of the house. The insurance policy is often cheaper to buy but has several benefits. The insurance policy is making you able to stop worrying about the contents of your house, such as furniture, household utensils, and other valuables. The premiums of the content insurance are often having a time span after which you don’t need to pay more premiums. However, you have to make it sure that your policy is covering all of the contents of your house.

5. Travel Insurance

The travel insurance is the policy which is intended to make it sure you are safe in case if you travel another city or country. For instance, if you are going on a trip, you might reserve a travel insurance plan. You need to address the entire travel worries such as medical treatments, health insurance, life insurance, and auto insurance etc. You might also face numerous other situations such as the delays in the flights and any loss in the airport such as theft of bag or loss of passport etc.

6. Pet Insurance

The pet insurance policy is for people who are in deep love with their pets. The pet insurance policy is catering all the expenses related to your pet such as health and accidental liabilities. The pet insurance is comprising of the costs of veterinary treatments of the pet and the annual jabs such as spraying and neutering etc. The pet insurance is mostly needed in case of the health of the pets.

Why it’s beneficial for us?

The insurance policies are very beneficial for the common men because of certain reasons. For instance the life insurance is beneficial mainly because of the factor that it will secure your family even in case if you are not existing. The life insurance is of extreme importance if you are in a job having life risks or you are working in a place having life threats. Therefore, the life insurance is in other terms meaning to secure your family from monetization loss. In case of your death the insurance company will provide your family enough money that they could bear the expenses of the funeral and have a financial cushion for the rest of life. When having an estimation for the amount of the life insurance you are required to remember the factor that not only the funeral expenses are included but the mortgage and living expenses are included as well. This will make it sure that your family is no need of money from anyone else.

The health insurance has its own benefits as well. In case when you are not able to pay the expenses of private hospitals but you need to be diagnosed, you have to have a health insurance plan. The health insurance plan is comprising of all the expenses that you might be having in case of diagnosis at the medical center. The health insurance is covering the expense of the room that you will have in the hospital, bills of all medical tests and examinations such as blood tests, Xrays, and MRIs etc. Whereas the expenses of all medicines are also included in the medical insurance plans. The health insurance is a must to have in countries such as USA as the expenses are way too high and beyond reach of a common man.

There are numerous benefits of the auto/car insurance as it will have a surety that you will be compensated for loss in case of any damage. The auto or car insurance is of great importance these days as we have many riots and protests. In case if the Protestants are making any damage and your car is also effected, then it is the liability of the insurance company to give you the amount for the repairs. Moreover, in case of theft of the car, the insurance company will provide you the entire amount of the car or auto you had. In case of accident, the car insurance company will pay for the expenses of the renovation of car and your medical expenses as well.

The home insurance is also of great importance as in case of natural disasters such as floods, earthquake, and tornado etc. you will be compensated for the loss. Home is the ultimate asset of everyone’s life and needed to be secured from all insecurities. Therefore, having the home insurance will make you feel free from the headache to worry about your house. The pet insurance is mainly important because it will make you worry free form the expenses of your pets. The pet insurance is covering the entire expenses of the medical and theft coverage of the pets. Therefore, in case if your pet fall in ailment, you need not to worry about the money for his/her cure, but you need to take your pet to nearest pet hospital for diagnosis.

What type of people need these insurance policies?

Now a question arises that what type of people are in need of such insurance policies? The answer to the question is very simple that every common man is in need of one or the other insurance policy. This is because the common man is not able to pay for the expenses all at once. Therefore, they are having the requirement to have an insurance plan for every single thing possible to have the compensation for the loss.

The people who have built their houses after hardships are surely in need to have the home insurance plans because they would never wish anything bad may happen to their houses. For instance, in case of a tornado or any other natural or manmade disaster, the home and its possessions must be safe or insured. This is because a common man is not able to build a house twice with his earnings. Therefore the house and its possessions needed to be inured.

The world is having unrest at a very fast pace and is the reason why every person must have the life insurance. Your life insurance will make it sure for your family after your death to have a financial cushion. The premiums of the life insurance are however depending on the type of insurance policy being registered. The auto insurance is making you have a sigh of relief because you need not to worry about driving in area having overloaded traffic or any accident. The auto insurance will ensure you to have the compensation for the repair of damage and even entire amount of the car in case of theft. Health is a very necessary objective of life and having a health insurance will make a common man to stop worrying about the medical expenses. The people who are not having enough money to take care of their health must go for the health insurance. The health insurance will provide them a safeguard against the medical bills and the medicines. In case, if you are in love with your pet and don’t want to lose it in any case, you can go for its insurance. The pet insurance is the surety of the medical care of the pets and their other necessities as well.