Introduction:
The important thing about life is that it is uncertain. unfortunately, sometimes incidents happen, such as car accidents, robbery, or death of your loved ones. At this time, someone spends all his accumulated wealth to overcome the loss. So, that’s why insurance types planning is important.
Insurance is a type of risk management, it means an arrangement in which a company or state takes responsibility to overcome your losses such as sudden accident, death car crash, or illness.
Benefits of insurance types planning:
Tax benefits:
One can lower taxes by buying insurance types plans. For example, the amount you pay for health can tax deduction under the Income Tax Act. However, you can lower the tax on your income by buying insurance policies.
Mental satisfaction:
When you have set your plans for the future like a well-planned insurance portfolio, it is a source of mental peace. As you know you have backups for any loss in case of accidents or any other damage. You can also plan for the well-being of your family even after your death.
Financial security:
Financial insurance includes a large number of products that protect your business, from market fluctuations, and other financial uncertainties. So insurance policies enable you to cover your financial losses in case of any emergency.
Protection against risks:
Insurance plans protect against all types of risks such as financial, illness, and death. Well-planned insurance secures you and your family from unseen losses of your savings. It maintains your lifestyle by protecting your savings.
Types of insurance:
There are many insurance types are there. Let’s discuss some of the important types:
Vehicle insurance:
Someone can own the insurance for Vehicles, depending on the type of vehicle they have. With vehicle or motor insurance plans, individuals can cover their losses in case of vehicle theft, damage, or any other loss. There are two types of vehicle insurance:
Third-party liability insurance:
In the case of this kind of insurance, third-party coverage protects the policyholder, if there is a loss or damage to the vehicle. This type of insurance is recommended for older, inexpensive, and cheaper to repair because it reduces the risk and liability of the policyholder.
Comprehensive insurance:
This coverage has broad protection against vehicle loss, accident, and third-party claims from an accident. Under a single policy, the policyholder can get extra protection by buying add-on options. In this way, you don’t have to buy multiple policies for any type of damage.
Life insurance:
Life insurance provides you the coverage of loss in case of a policyholder’s death. There are four types of life insurance.
Term life insurance:
This insurance policy is for a certain period ranging from 10-30 years.
Whole life insurance:
The coverage for the whole life provides guaranteed benefits in the event of death such as cash accumulations.
Universal life insurance:
It is a type of permanent life insurance; like life insurance, it provides death benefits.
Health insurance:
Health insurance covers routine and emergency care for the policyholder. Nowadays medication is not easy, it is quite expensive. Sometimes, income is not enough to meet the expenses for medication, especially in an emergency. Uncertainties are part of life so health insurance protects savings. One can purchase this insurance from any insurance company, federal health insurance marketplace, offered by an employer, or Medicaid coverage.
Before navigating to health insurance, it is necessary to keep in mind some key points:
Firstly, prepare a list of your needs such as monthly or weekly visits and your regular medications.
Secondly, carefully check the insurance coverage to choose the right one, which includes doctor visits, hospital stays, and prescriptions.
Don’t forget to know the three things: annual deductible (the amount the policyholder pays before the insurance kicks in), copayments, and out-of-pocket maximum.
Types of health insurance:
There are two main insurance types of health insurance: individual health insurance and group health insurance, offered by the insurance companies. Let’s dive into the difference between these two types.
Individual health insurance:
insurance types covers only one person, the policyholder. Only a single person gets benefits from the policy. The policyholder can buy any add-ons and can directly claim from the company. The age of the policyholder should be at least 18 years.
Group health insurance:
Group health comprises more than one person; it may be a group of employees or family members. The members can buy ads ones but they are limited. A single person does not have the full control over the coverage. Claims are made through third-party administration.
Home insurance:
It is beneficial for the protection of your home in case of any damage, robbery, or injury. You should carefully document your belongings to manage the process of claim timely. If your home is to be rebuilt, make sure the coverage is enough for this. If there is a risk to your home, buy other policies such as flood or earthquake insurance.
Comparison of the insurance types:
This table contains all the basic information and all the aspects that will compare the insurance types easily. This table will be helpful for you to understand the differences between these four main types.
| Types of insurance | vehicle insurance | Health insurance | Home insurance | Life insurance |
| Purpose | Covers the damage due to accidents, natural disasters, or robbery | Covers expenses of illness, surgery and hospitalization. | Protect home from damage and damage to personal belongings | Financial support to the beneficiaries at the death of policyholder |
| Coverage | Lability, accident damage and uninsured motorist | Doctor’s prescribed medicine’s expenses , hospital bills and surgery expenses | Liability, home content, home structure. | lump-sum payment at the death of policyholder |
| Premium factors | Age, coverage level, and vehicle type | Coverage level, age health conditions and location. | Safety features, location, home vale and coverage level | Policy’s term length, health condition, age and coverage payouts. |
| Compulsory/Optional | Compulsory for drivers in some cases | Optional, high recommendations | Optional, mostly for mortgage holders | Optional, highly recommended for family’s safety |
| Claim process | Make a claim after an accident, provide the proof of the damage or repair expenses | Provide hospital bills, claim for reimbursement | Submit claims in case of robbery, damage or other loss | Insured claim at the time of death of policyholder to receive payouts |
| Add-ons | Coverage for vehicles damaged during roadside activities and rental car coverage | Any kind of illness e.g. vision, fracture, surgery, maternity and critical illness | Natural disaster e.g. flood or earth quake and high value home content coverage | Accidental death benefits, waiver of premium |
| Duration | Annual or semi-annual renewable plans | Longer plans or annually renewable | This is Annually renewable | Whole life or term(10,20,30 years) |
Summary:
Insurance types is necessary to protect your assets, in case of any damage. However, there are different types such as health, home, life, and motor insurance. If someone wants to purchase any of them, he/she should have a full-fledged understanding of that certain type. So this guide would be beneficial for those who are going to buy insurance coverage and want to compare these types for this purpose. Stay connected for more informative guides like this.
