Different Types of Insurance Policies You Need to Know About

Insurance policies broadly classified into three types. They are:

1. General insurance policies
2. Life insurance policies
3. Health insurance policies

1. General insurance policies: General insurance provides the protection for an individual to secure their assets, property, home, vehicle against loss.
General insurance is the insurance agreement between an individual and insurance company, in which the individual pays certain amount of money to the company in exchange of getting the benefit for the future loss.

General insurances are classified into several types, depending on what is insured:

• Home insurance or building insurance: This insurance insures your home against losses from natural disasters and fire accidents
• Landlords insurance: This is for landlords against losses resulting from earthquake and tsunami. It similar to home insurance.
• Flood insurance: This insurance insures your properties against loses from floods. This helps people, living in most flood occur area.
• Auto insurance: Auto insurance, insures your automobiles such as cars against losses. Such as car damage in accidents. It also insurance provides cost of damage, if car get damage due to other car owner. This provides death benefits, if a person die in accident and also provides medical expenses for injured person.
• Property insurance: Property insurances protects your property against ch losses. Such as loss from fire, earthquake, floods.

2. Life insurance policies:
Life insurance policies provide the protection for the human life. It helps the individual to provide security to his/her family or to provide financial support to his/ her family members after his/her death.

Life insurance is an agreement between the individual and insurance company, in which the individual pays premiums to the company in exchange receive the benefits after individuals’ death for family.

Life insurance policies are classified based on some parameters like benefits covered, years, premium amount, and other regulations. Based on the above parameters life insurances are mainly divide into two categories. They are as follows.
i. Term life insurances
ii. Permanent life insurances

i. Term life insurances policies:
Term life insurance, as the name suggests, it is the life insurance for a particular period of time. It is a type of insurance which secures the individual life for a period of time. In this type of insurance policies the individual pays premium to the company for secure his/her life for a certain period. If individual dies within this period, the insurance company pays some amount of money to the nominee or the beneficiary of the policy.

In this type of insurances the premium could remain the same. Premiums are more easily afforded because the insurance company expects that the death of the policy holder is not likely to be occurred over the term. If any uncertain event is not occurred over the term then the policy holder will not get any benefits after the policy maturity. This is the drawback of this policy, so that economically and highly recommended for the youth and employees is to take the permanent life insurance policies
The term life insurance are classified into three types they are as follows.

• Level term life insurance: In this type of policy the premiums remains same and the death benefit also remains same. This type of insurances requires you to select particular period and pays the premiums for that period, after the period matures you will not get any benefits.
• Group term life insurance: These type of insurances are taken by employers for their employees. The employer pays the premium for the insurance company. The employer may bear the premium amount or else they can deduct from the individual employees salary. This type of insurance is offered for the employees as a part of their welfare benefit. It is a term life insurance policy that covers the group of people( employees) , pays the death benefits to his or her beneficiaries.

ii. Permanent life insurances policies:
Permanent life insurance policies are expensive in nature. They give benefits or protect policy holder for a long time. This type of policy cannot be stopped on any way as long as you pay the premiums regularly. Sometimes these types of policies give excess amount of money to the beneficiary after your death. You pay for the premium for a long period, so that you may have an option to raise loan on your funds.

There are various types, they are.

• Whole life insurance: As the name implies, it is the policy for an individual over life time. This type of policies helps the individual to make substantial investment on his/her policy.
• Universal life insurance: This type of life insurance policy requires you to pay the premiums for a fixed period. The premium amount will be constant.
• Variable universal life insurance: In this, the insurance company invests your premiums in stock market. This policy is very risky in nature as the returns depend on your stock performance. If the stock perform well then returns will be high.

3. Health insurance policies:
Health insurance insures your health from all possible losses on account of ill health. Health insurance provides benefits for all surgeries and operations cost, medical expenses for the insurance holder and a great saving for tax. For example: you need a emergency surgery that coast worth of $ 500, it will be a big amount to set on the time. If you may have health insurance policy then the insurance firm pays total cost of surgery and also pays for medical expenses, lab expenses.

These are the various insurance policies, one can avail as per the need.

Benefits and Exclusions and Limitations of Personal Accident Insurance

You can be protected from accidental expenditure by this personal accident insurance and it will pay some lump sum amount for injury or death because of accident. Benefits depends on insurance company, there are some general benefits such as:

• A set of cash sum on death is paid by a simple personal accident policy.
• It may be cash sum, a monthly income or they may pay a mixture of two.
• There are some specific payments for specific injuries like total loss of speech, hearing or sight and total loss of or use of hand or foot.
• Hospital cash can be paid for every day if you are in hospital.
• Other features are like 24/7 help line, counseling, rehabilitation.

There are some exclusions and limitations: These exclusions and limitation depend on insurance company and some common things are:

• This insurance policy will pay the compensation, if you have any physical injury due to accident.
• This policy does not pay for car, property, and animals which are damaged or lost in accident. You are not paid for inconvenience, lost work, injured pride or etc.

Other common exclusions: Disability because of the AIDS/HIV, war, normal pregnancy and childbirth, injury due to suicide attempt, self injury, criminal acts, failing medical advice, having a part in any dangerous or hazardous work, activity, sport or hobby, having military duty, driving by having more alcohol are not allowed by law.

These are some common exclusions and limitations, this information may help you to take the decision in choosing the insurance policy.

Know About ULIP

ULIP is a insurance plan, which is market linked. The way of investing the premium money is difference between ULIP and other insurance plans. General premiums like an endowment plan is invested in instruments, which are risk free like government securities and AAA rated corporate paper. And these ULIP premiums are invested in stock markets and in corporate bonds. So, it is attractive to individuals, because of this reason.

Benefits of risk protection and flexibility in investments are provided by Unit Linked Insurance Plan. Depending on the performance of the funds in the capital market, returns will be received by the investor in a ULIP. There is an option for an investor to invest in different schemes like equity funds, diversified funds, debt funds, balanced funds etc. Here the important thing is risk.

Transparency: If we compare with traditional investment plans, a transparent option is offered by the ULIP for the customers to plan their different life stage needs by market-led investments.

Savings and Insurance cover: Life insurance with savings at market linked returns are provided by ULIP. We can say ULIP as two in one plan because life insurance and savings are provided by the ULIP. It is not similar to the mutual-funds because those do not provide the life insurance cover.

Multiple Investment Options: There are multiple options for individuals to invest and it offers life insurance plan. Generally, ULIP comes with three variants like:

• Aggressive ULIPs in which 80 percent invest in equities and 20 percent in debt.
• Balanced ULIPs in which around 40 to 60 percent of investment in equities.
• Conservative ULIPs in which up to 20 percent investment can be done in equities.

The allocation of equity and debt are changed as per insurance company, these are generally designed options.

Benefits of Commercial Insurance

Commercial insurance is very useful to industries and oil rigs. Every businessman tries to maximize the profits and minimizes the cost. Almost everything in industry or factory should try to get covered by insurance policy. Thousands of workers work in companies and some accidents bound to happen. For suppose, oil spills, explosions, fire, injury may happen in oil rigs due to machine malfunction and so on. So business men should take a comprehensive policy.

Insurance companies launched commercial insurance to help the business men to protect from the risk of business, including:

a. Particular liability exposure arising from the business vehicles’ operation
b. Destruction or damage to business vehicles
c. Damage of destruction to inventory or office equipment
d. Loss or theft of equipment and tools
e. Particular business related liability exposures like, slander, search or wrongful entry and even particular faults happening out of business’ advertising
f. Fall of income in case business man has to close up shop temporarily due to covered loss
g. Risks to cargo while in storage or transit
i. Coverage of crime including burglary, robbery, employee dishonesty,etc.

In this way commercial insurance helps the businessmen in their business to remove the loss of damage or destruction.

Related Links:
Claims management software
Public liability insurance

Types of Vehicle Insurance

Every vehicle should have insurance to move on the roads and it is compulsory under the provisions of the vehicle insurance. People should purchase insurance for the vehicles, which may be used for domestic, business and pleasure purposes. Nobody should oppose this rule, as it is very important to have vehicle insurance. Moreover, if any person opposes this, they are subjected to punishment.

Different types of vehicle insurances are:

Comprehensive Auto insurance:
In this, insurance company insures all types of events like an accident or theft. Here, there is no need to show the fault to claim the insurance. In this insured can claim against the insurance company without showing any insurance details. If anybody steals insured’s vehicle then he is allowed by comprehensive insurance to claim against the insurance company.

Third party insurance:
In this, if any accident occurs due to fault of third party, then also company will cover the loss. But in other incidents company will not make any payment. In this owners can insure their old vehicles with no value or with little value and this is cheapest type of insurance.

Related Links:
Claims management software
Construction insurance