No one expects an accident, illness, natural disaster or death, but most people know that any one of these is possible at any time. Insurance is a product you can buy that relieves you of the financial burden these perils can cause and gives you peace of mind. In most cases, these disasters require a much higher financial burden that can be kept in a savings account.
Insurance is a legal agreement in which the insurance company agrees to cover the financial losses incurred for the contingency of the policy. Some of the most common contingencies are life, health, auto and homeowners.
There are several types of life insurance. Term insurance is the simplest and least expensive, especially if you purchase it when you are young. Term insurance pays an agreed-upon amount to your beneficiary when you die if you die during the term of the police. Term life insurance is often used to protect your income until your children become adults or to make sure your partner can pay off the mortgage on your home if you die.
If the policyholder doesn’t die within the term, the contract is finished and there is no financial gain. Whole Life Insurance covers you for your whole life and has a cash value that grows as you pay your premiums. You can borrow against it as it acts as a savings account. There are different types of Whole Life offering different benefits, and some may include tax breaks.
Medical costs are rising every year and cause many people to go into debt just to pay for life-saving treatment for a loved one. For instance, a private health insurance policy will cover the medical costs of expensive treatments. For this reason alone, health insurance is extremely important. There are several different types of health insurance policies available. You can buy a generic policy or a policy for a specific disease. There are specific policies for families, single parents, couples and singles.
Business insurance is essential for small and large companies. The business owner can relax about losses that arise from insurable risk and focus on their business. The insurance will ensure the business has a normal margin of profit at all time because it is protected from unexpected losses.
According to law, you must have a compulsory third party (CTP) car insurance. This means your insurance will cover the medical costs of the third party if there is an injury received in an accident. However, it will not cover the damages to the other person’s car or any of your damages.
Comprehensive car insurance is the best choice for most people. It covers the replacement or repair of your car for collision, theft, malicious damage, natural disasters and fire. According to the inclusions you choose, it can also cover replacement or repair any other cars involved in your accident including property. If you crash into someone’s front yard, you may have to pay for damages to fences, steps or landscaping. If you need your car for your livelihood, comprehensive car insurance is a small price to pay for peace of mind about all the things that can go wrong on the road.
Your home is probably the largest investment you make. If it is destroyed by fire, wind storms, lightning or other natural disaster or attacked by a burglar, homeowners insurance can cover the financial cost of damaged or lost property. Certain policies will also cover any injury to a visitor at your home.
Umbrella insurance is a type of liability insurance that is valuable for people who own a lot of expensive assets and are at high risk of being sued. Along with auto, home and boat insurance, it covers libel, slander, vandalism and invasion of privacy.