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Insurance Policy Types- The Maze : Loan Insurance US

Friday, June 13, 2014

Types of Insurance Policies

Image Credit Goes To: lifeinsurance-quotes.co.za

A Quote
Love is the only kind of fire which is never covered by insurance.- Anonymous

The Gamut of Insurance

Did you read the quote above? If you are a savvy finance person, you will readily agree to it. There is hardly anybody for who there is not an insurance policy out there. There is hardly anything there is not an insurance policy for down here.

Everything and everyone is covered! Your tooth is covered. So is my casket. Your home is covered. So is my bike. Your company is covered. So is my ailment. In the midst of so many coverage options, you and I just get confused.

The commoners like you and I are mostly familiar with the term ‘life insurance’ only. But there are more to it. And you need to know them all. Why? You might ask.

Reason is you may need them. You may have life situationsrequiring the knowledge. You may have finance situationsrequiring the information. And knowledge, you know, pays. Information, you know, is investment. Who knows when a little bit of knowledge will come to use?  Knowing is usefully important. Methinks it more than fills your curiosity column. And curiosity does not always kill the cat. It informs as well.

But perhaps you cannot know them all—the insurance policy types. Why? Simple—they have so many categories and sub-categories. That is not the problem. Problem is the insurance companies attach them product names. More precisely to say, the companies give them their brand names. So what is X with Y is Y with X.

Not to make a mince I am giving you only a broader-view categorization of the types of insurance policies that are out there.As ever, my post is in the question- answer format:

The Basic Types of Insurance

If you visit an insurance company, you will find a pretty long list of their services and products. Analyzing them, they may be classified in the following way— 

Life Insurance 

Health Insurance - Covers all treatment costs like doctor’s fees, drug bills, hospital stay bills or even transportation bills by some companies.

Death Insurance - Provides pension to the nominee(s) of upon death of the policy holder. The benefit may come in monthly or in a one-time package as per the policy deal.

Accident Insurance — Covers expenses for treatment of injuries or damage caused by an accident (by car etc.)

Animal Insurance — Generally known as pet insurance, the owner or a pet insures the pet against possible health hazards. The company bears the expenses of all the treatment of the insured pet.

Non-Life Insurance 

Property Insurance — Provides compensation for damage caused to your property by some accident like fire or quake.

Liability Insurance — Liability insurance is of two types—

Professional Liability Insurance -- An insurance for those whose jobs involve professional risks due to the nature of their professions. Useful for lawyers or doctors as their professions involve risks hugely. Lowers down their financial risks for professional errors-and-omissions. 

Managerial Liability Insurance —  Useful for people like company CEOs, managers or directors. Their financial risks are covered by this policy in the event of allegations of physical or psychological harassment of an employee, unlawful termination  or corruption or fraud. 

Credit Insurance — Insures repayment of loan in case of the policy holder’s death or disability or undesired unemployment.

Disaster Insurance—Disaster insurance works against natural  catastrophes like floods, cyclone etc. 

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