Types, Benefits and Importance of Insurance

Types, Benefits and Importance of Insurance

Types, Benefits and Importance of Insurance. Insurance is a legitimate agreement between the insurance providing company (insurer) and the individual (insured). It plays a role of safeguarding the interest of people from loss and uncertainty. Insurance is a kind of social device that eliminates risk of loss to life and property.

Types, Benefits and Importance of Insurance

Types, Benefits and Importance of Insurance

Insurance offers a lot to the economic growth of the society by providing stability to the functioning of process.

Importance of Insurance

Types, Benefits and Importance of Insurance

Insurance schemes make our life more secure. They protect us when ‘something happens’ to us. For instance, health insurance pays for the medical costs in case of illness, life insurance pays a certain sum of money to the dependents in case of death, and liability insurance pays for damage due to an accident. For this protection, you have to pay a certain amount of money, called premium, to the insurer. The system works because insurance companies get premium from a lot of people but have to pay out only to a few people in case of death, illness, or accidents.

Types of Insurance

There are several types of insurance policies, but commonly there are only following types of Insurance:-

1. Health Insurance

Types, Benefits and Importance of Insurance

Firstly, Insurance that pays for your medical expenses and expensive treatments is called Health Insurance. There are different types of health insurance policies covering different diseases and ailments. Having a general health insurance is best for specific diseases. In contrast, the premium paid for a health insurance policy includes medication costs, hospitalization and treatment.

Types, Benefits and Importance of Insurance

2. Life Insurance

Most useful and most common type of insurance is life insurance. As its name suggests, its an insurance for your life. One should buy life insurance to financially secure his dependents in the event of untimely death. Particularly, life insurance is much important when you are only the sole earner of your family. Life insurance ensures the policy holder, that his family will be compensated if he expires during the term of the policy.

3. Education Insurance

Education insurance is relatable to life insurance policy. An education insurance can help you in case when your child reaches higher education by providing you a bunch sum amount of money. With you being the legal guardian of the child, education insurance offers you fund to pay for the education expenses. Guardian is also the owner of the policy.

Types, Benefits and Importance of Insurance

4. Car Insurance

If you are a car owner then you need to get a car insurance as soon as possible. Because this insurance protects you from incidents like accidents. Moreover, you can also get compensation for damages to your car due to natural calamities like floods and earthquakes. Also, you have to pay for damages caused by you to other vehicle owners.

5. Home insurance

Home insurance covers losses or damages caused to your home by fires and other natural calamities. Natural calamities can be anything, like lightning, floods, earthquakes etc. Home insurance is must for a safe dream home.

FACT:- Did You Know

Insurance companies can insure themselves. They get this done by a special ‘ reinsurance company’.


Whether, it is life insurance, health insurance of home insurance, you can easily buy an insurance policy online as well as offline. Other than that you can also get help from insurance agents to buy an policy. Finally, before investing in an insurance policy, don’t forget to go through a thorough research.

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  1. Youre so cool! I dont suppose Ive read anything like this before. So nice to find somebody with some original thoughts on this subject. realy thank you for starting this up. this website is something that is needed on the web, someone with a little originality. useful job for bringing something new to the internet!

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