Guide To The Different Types Of Insurance

There are uncertainties in life. Unexpected expenses are inevitable even when we think that we are financially secured.

Perhaps you have everything planned out already. But then, unexpected circumstances occur and hinders your journey to financial stability. To avoid this kind of situation, you need to have insurance.

There’s a large number of insurance policies, but here are the most important types.

Life Insurance

Life insurance is a policy that gives financial coverage for a policyholder’s family members after death. This is a great help especially if you are the sole provider for your family. It helps keep your family to be financially secured even in your absence.

There are different insurance policies from Life Insurance:

Term Plan

Term Plan is life insurance that is available only for a specified period of time. For example, you settled for a period of twenty (20) years. Your family members can only get the benefits for the span of twenty (20) years

Endowment Plan

Endowment Plan is an insurance policy where part of your premium goes to the death benefit. Your insurer will give you the remaining half.

Some of the help given with the Endowment Plan are maturity benefits, death benefits, and other periodic bonuses.

Whole Life Insurance

Unlike Term Plan, Whole Life Insurance is a life insurance policy. It offers financial coverage for the whole lifetime. Though some other insurer limits it up to100 years

Child’s Plan

It is a life insurance that provides financial assistance to your children. They note that they assist your child all through their lifetime. You can acquire the death benefit through a lump-sum payment after the death of the parents.  

Retirement Plan

Retirement Plan is a combination of investment and insurance. A part of the premiums is used to create a retirement collection for policy holders. After the policy holder retires, they can get this through a lump-sum or monthly payment.

General Insurance

General Insurance offers financial aid on other losses. They compensate for liabilities like your house, car, health, and travel. They will help you by covering for the damages to your car or house. They can also cover your health needs and financial problems during your travel.

Here are types of general insurance:

Health Insurance

This covers your medical and health care. They will either pay or reimburse the amount you spend for your medical needs. It covers hospitalization, treatment of critical illness, medical bills, and daycare procedures.

You can also use it for maternity and accident coverage. If ever you have a pre-existing disease before you applied for health insurance, they will also cover your medical expenses. There are insurance holders that allow coverage for your treatment.

Motor Insurance

Motor insurance is the financial coverage for your car and your two-wheel vehicles. It provides you financial protection for your vehicles. Especially in cases of loss due to accident, theft, or damage. This also includes loss from fire and natural calamities.

Travel Insurance

Travel Insurance is your financial assistance in case of emergencies during your travel.

Those cases are medical or non-medical emergencies. You can use it when you travel inside and outside of your country.

There are two types of policies with travel insurance. The first one is the Single Trip policy, which covers your trip for one hundred eighty (180) days. The second one is the Annual Multi Trip policy, which covers your trips within one yer.

Property Insurance

Property Insurance covers your residence or commercial space. When there is damage to your property, this will assist you with your financial needs. This also covers everything inside your property.

Fire Insurance

If the fire caused damages to your properties, this insurance will compensate for all those damages. This insurance policy will cover your insured property and its surrounding structures. They will assist you for replacement, repair, or reconstruction of your damaged properties.

It can also cover a third-party property that is damaged by the fire. They also take care of the expenses of the affected livelihood.

Steps in Buying Insurance

If you want to buy your insurance policy, here are the steps that you can do.

Step 1: Know Your Needs

Before going to the insurance providers, understand the covers that you need. Base it on your personal needs. Next, is to get all the necessary details that will be asked by the insurance providers.

For example, you want to get car insurance, you need to provide them details of your vehicle.

Step 2: Check for Other Options

Check the details from different insurance providers. Compare the benefits that they offer. Also, check and understand the add-ons that they offer. Do not forget to know about other services that they offer and the exclusions.

Step 3: Choose the Right Plan

Once you are done with step 1 and step 2, you can now choose your plan. Consider the plans that would give you the best benefits for your needs. You should also contact the company so that they will assist with your application.

Step 4: Pay Your Premiums

The last step is to fill your application with the necessary information. Then pay your premium. Some insurers will let you pay online. Or you can also pay through a broker.

Expert Tip

Some people avoid claiming from their insurance if it has a no-claims bonus (NCB) or no-claims discount. The more years you don’t make a claim, the higher discount you can get from 20% to 60%. This means that if there is no claim done for the last 5 years, you can get a big discount from your premium for the next year.

This is why some people opt to get a loan from a legal money lender instead of making a claim. Let’s say you got into a minor car accident. A scratch can be dealt with easily with a personal loan if you have not enough cash. Just make sure that the interest is reasonable and the payment term is something you can pay with ease.