Why Do We Need Insurance? – Evan T Smith

We have come to an age where insurance policies have become an integrated part of our lives. Insurance acts as a shield that protects us from the contingent financial losses from the unfortunate events of the future.

Types of insurances

To cater to the different needs of a human life, various types of insurance policies have been devised till date. However, following are the most prominent categories of insurance,

Life insurance

The life insurance policy covers the risks associated with the life of the policy holder. The insurer promises to cover the financial losses attached with the untimely death of the insured. The benefits of the policy are then paid to the family of the decedent insured in lump sum or in the form of annuity.

Health insurance.

The costs associated with the medical treatments are often unexpected and can cause your savings to emaciate to a great extent. The health insurance policy pays towards the medical expenses of the insured. Often it covers wide range of services, like- the hospitalization costs, costs associated with check-ups and surgeries, prescription drugs so on and so forth. Only the health insurers who offer cheap insurance might choose to differ.

The health insurance providers offer both individual and group health policies. The group health coverages are normally offered by the employers and cover individuals exposed to similar kind of health hazards. The lax qualifying criteria for the group health policy allow more people to receive coverages in an affordable rate. The government organizations also offer subsidized health coverage to the underprivileged, who otherwise can’t afford health insurance plans.

Auto insurance

Auto insurance through the mere size of demand, constitutes the largest market for insurance in USA. You are required to carry the proof insurance while driving, if you want to continue with the privileges of driving in the country. Also auto is the second largest investment after house that an individual makes in his/her life. Hence, the sear desire to protect it from the unexpected, emanates the need of an auto policy.

Home insurance

Home insurance covers your dwelling along with its contents from the ‘acts of god’ and some named human errors. The renter’s policy, however, covers only the content of the renter and not the structure, which is a property of the landowner and covered under his/her policy. The homeowners’ insurance also offers coverages against burglary and vandalism.

Disability insurance

Every three out of ten Americans may experience disability in their lifetime. However, the costs associated with disability aren’t normally covered under any other available forms of insurance. The disability policies are available to cover both the short term and the long term disabilities. The disability plan compensates for the loss of income during the phase of disability.

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