7 Types of Insurances to Boost Your Financial Knowledge

Before focusing on the various types of insurance policies available, you need to understand what insurance is. Insurance is a legal contract represented by a policy in which an individual, business, or entity is given financial protection and refinance against any losses by an insurance provider.

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By pooling risks, the company can make the payments affordable to the client. These payments are called premiums. Getting insurance can be of great benefit to you both physically and financially. With an updated policy, you are well protected from any financial loss resulting from physical damage to you or your property. This protection can further be extended to shield you from any liability for damages caused to a third party.

This article is focused on some of the major insurance policies people take.

Life Insurance.

This is the most common type of insurance. This type of insurance is rather different from other types as the subject matter, in this case, is the actual life of a person. In this case, the insurance firm is expected to pay the fixed amount of insurance to the family of the insured at the time of death or when the agreed period expires. Life insurance is the most popular type of insurance with a huge number of clients as every person values life.

Under this policy, the company offers financial protection to the family of the deceased in the event of premature death or gives a significant amount to the insured during old age, when they are no longer able to fend for themselves. Life insurances are also considered one of the best investments as you will be able to receive a given amount upon expiry of your terms, or your family could become beneficiaries in the event of your death.

Fire Insurance.

Fire can destroy your entire property and even those of your neighbours, setting you miles back. However, with a fire insurance cover, damages and losses resulting from a fire can be compensated, getting you and the people around you back on your feet in record time. This type of insurance is common among restaurant, hotel, and processing plant owners.

With this insurance, the insurer will provide the necessary funds and support to reinstate you to your previous state before the fire. Under this cover, you can as well get protection from riots, turmoil, and even war.

Jet Ski Insurance and Personal Watercraft Insurance.

Jet Skis are considered personal watercraft by various authorities and insurers. Before jetting out into the uncertain waters, it is best to check if your jet ski insurance and personal watercraft insurance covers are in order.

Despite not being mandatory like road vehicles, it would be wise to get one nonetheless. With these two insurance policies in check, you and your jet ski are well protected from vandalism, accidents, and even liabilities in case of any damages or injuries caused by your jet ski or watercraft.

Get a jet ski insurance quote before hitting the waters to gain protection from accident-related medical bills, fuel spills towing, and other emergency service fees. You can also get cover for certain personal properties such as cell phones and even clothing with the right insurer.

Guarantee Insurance.

This is one of the rising popular insurance covers in the business world. The cover is taken in the event of a loss arising from the disloyalty, disappearance, and dishonesty of employees or a second party. The second party needs to be part of the contract for this insurance to take effect.

Failure of the second party to hold their end of the contract can cause a loss to the first party. An example is in the export insurance, where the cover is used to compensate the exporter if the importer fails to clear their debt.

Social Insurance.

In most cases, this insurance is taken by authorities. It is mainly taken to protect the weaker sections of the society who cannot meet the basic requirements to pay for the insurance. This insurance cover can further be divided into sickness insurance, pension plans, disability benefits, unemployment benefits, and industrial insurance.

Auto Insurance.

There is not a single day that goes by without reports of a car accident. This being the case, various authorities mandate that every motorist should have an auto insurance cover. Auto insurance can help protect you from liabilities or damages caused by your vehicle.

This insurance can also help you receive replacement or repair funds depending on the nature of the accident. This insurance also safeguards you from losses arising from theft, vandalism, or even weather extremities.

Health Insurance.

This is one of the vital insurance to take out in this era of rising medical bills. You never know when a serious illness may strike. If you already have a cover, it may be wise to increase your coverage on the safe side. This cover can either be provided by your employer, or you can as well take out one by yourself.