Basic Types of Insurance

We are living in a world full of risks. You never know when an accident or natural disaster will strike, which may greatly affect you. It may lead to loss of income, health problems, damages to your properties, and even death. Thankfully there is insurance that can financially protect you from these kinds of losses.

There are several policies available to cover people in different scenarios. You don’t necessarily need to buy all of it but some of these are compulsory. Using the risk management tools, you can evaluate which policies you certainly need.

Types of Insurance

Below is the list of basic types of insurance policies that people usually purchase.

  • Life Insurance

This type of insurance will definitely assure the insured person that no matter what happens to him/her, the family that they will leave behind won’t have any financial problem. Generally, life insurance covers ten times the yearly income of the insured. If you want to estimate the amount for your life insurance coverage, you need to include several factors aside for the funeral expenses. Some of these are mortgage payments, living expenses, child care, and future college costs of your children.

  • Health Insurance

Based on statistics, most bankruptcies filed were due to health problems and most of them were people who don’t have health insurance. Thus, it is really important to purchase a policy for you and your family. It covers medical expenses, doctor’s fee, medications needed by the patient, and even checkups. The challenge is finding a less expensive policy because it can be difficult, especially if you don’t have an employer-sponsored program or a pre-existing condition.

  • Automotive Insurance

This is one of the policies that are compulsory in some places if you own a car. To assure that every driver adheres to this law, there are random checks in the streets. If you don’t have any insurance, you will need to pay a fine which is different for every place and it can also range up to the suspension of your driver’s license.You can choose a complete package of this insurance that covers all possible losses related to car accidents. However, you can also customize your needs, set the limits, and add coverage for other risks.

  • Homeowner’s Insurance

Protect your home from all kinds of risks with this insurance. The basic coverage will pay for the losses due to fire, lightning, windstorm, explosion, smoke, vandalism, sinkhole collapse, volcanic activity, vehicle collision, and civil commotion. You can also add coverage for special risks, such as burglary, nuclear hazard, and earthquake.