General

Types of Insurance and Their Benefits

Insurance gives you peace of mind against unforeseen tragedies. Discover the various types of insurance policies and their benefits in the following article.

There is almost an insurance policy for everything. However, some have greater importance than others. The following are the top insurance policies to protect you and your assets.

Health Insurance

Health insurance is among the most important policies that everyone should have. Without good health, you cannot work, earn money or even enjoy life. If a severe illness or an accident occurs while you are not insured, you must pay for the treatment and medical bills. Solving all these health expenses by yourself can be difficult and even result in bankruptcy.

Typically, most of people suffers bankruptcy due to medical expenses. Health insurance is an essential part of managing your key personal financial risks.

Some health plans can even cover screenings, vaccines, and checkups. You can easily manage your health and meet daily life demands. You can pay for premium health policies while filing your tax returns if you are a self-employed individual.

Benefits of Health Insurance

Cashless or Reimbursement Expenses

If you have sufficient medical cover, you do not have to pay anything from your pocket. You only have to go to a hospital within your insurance coverage and inform your insurer as early as possible. The insurer will directly pay for the bill. Additionally, you can receive treatment from a hospital of your choice and file for reimbursement claims in case of an emergency.

Maternity Benefits

Some insurance agencies cover maternity expenses in their policy. This is beneficial particularly to a young couple expecting or planning to have a child.

Extra Benefits

Apart from hospitalization costs, insurers usually provide coverage for consultancy, ambulance services, free preventive checkups, and lifetime renewability options.

Auto Insurance

If you drive, it is essential to have Auto Insurance. Paying for car accident damages can be very expensive. Generally, a car accident could cost you over $12000, excluding any injuries while a fatal accident could cost you more than $1.7 million.

These costs cover vehicle damage, medical expenses, and productivity losses. In most states, it’s mandatory to have basic liability insurance to cover injury or death, legal fees, and damages caused to others’ property.

Other states require you to have a motorist coverage and (PIP) personal injury protection. The importance of this coverage is to help cover medical expenses for both you and your passengers in case of an accident. It also helps cover accidents or collisions with uninsured drivers.

If you purchase a car on loan, it is also essential to include collision and comprehensive coverage in your policy to help pay for damages from accidents, vandalism, theft, etc. These are particularly important if replacing the car results in financial hardship.

Benefits of Auto Insurance

Wide Network of Garages

Most Auto insurances have a wide network of garages to ensure you receive services across the country. This helps you get repair services in case of damage to your vehicle.

No Claim Bonus

A no-claim bonus (NCB) is one of the significant benefits of auto insurance. As a customer, you are eligible for this benefit every year that you don’t make claims.

Third Party Liabilities

If your car gets involved in an accident and causes damage to other people’s property, this is covered by car insurance. Additionally, your car insurance protects you if you cause bodily injury or death to a third party.

Home Insurance

Your home might be your greatest asset; it is, therefore, necessary to ensure that you protect it against any damage. Most mortgage lenders require you to have this policy. It is also essential to have home insurance even after fully paying the mortgage. It helps pay for damages and injuries to guests caused by your family or pets.

Home insurance can also help in rebuilding or repairing detached structures. If you rent a house, ensure you have a renter’s policy to cover your items in case of a disaster, burglary, or fire. Similar to home insurance renter’s policy also offers liability protection.

Benefits of Home Insurance

Protect Your Main Dwelling

The importance of home insurance is to protect where you live. Suffering the total loss of your home due to a disaster or fire could be devastating. Home insurance ensures you get covered against minor and major damages.

Liability Coverage

This is one of the main reasons you should have home insurance. If someone gets injured on your premises and is held liable, it can cost you thousands of dollars. The home policy covers you from expensive lawsuits if such cases occur.

Coverage of Your Homes Content

Another benefit of home insurance is that it helps cover home appliances such as electronics, furniture, and other personal property. If an event that you covered happens, you get reimbursement depending on your policy.

Life Insurance

Life insurance is categorized into three: variable, universal, and whole. It all depends on how you agree with your insurer. Life insurance helps replace lost incomes, pay for children’s college education, and help pay debts for a married person. It helps cater to burial costs and settling debts you leave behind if you are single.

The cost of this insurance policy depends on your age and health. If you are young and healthy, the cost is low. Most insurance agencies require you to complete a medical exam before offering life policies.

Benefits of Life Insurance

Dependents Don’t Have to Worry About Living Expenses

Many experts recommend a life insurance policy 7 to 10 times your annual income. With this coverage, people who depend on you will not have to worry about their living expenses. If you have this policy, your children won’t need to struggle with student loans.

Coverage for Terminal or Chronic Illness

Most insurance agencies offer endorsements referred to as riders. The riders enable you to access your death benefits when certain things arise. For instance, if you get diagnosed with a chronic or terminal illness and have less than a year to live, you can use your death benefits to cater to medical expenses.

Payouts for Life Insurance are Tax Free

In the event of your death, your dependents will receive the whole sum of death benefits. They don’t have to report the money while filing their tax returns.

Insurance plays an essential role in our life. It helps us overcome financial loss if a catastrophe occurs. The insurance policies discussed above are the most important in protecting yourself and your properties. Take time and look for the most suitable policy and how it can work for you.