Insurance 101: The Basics You Need to Know
We’ve all heard it. When someone gets sick, when someone loses a house in a fire, when some loses a car, insurance would surely be a part of the conversation. It’s not just a comfort blanket that can take your worries away, it has become a practical and wise necessity in this day and age.
Yes, you might have heard this word in serious situations, or even in regular conversations. But do you really have any idea what insurance is? It sounds simple, but can be complex to understand for most. So we’re breaking it to you simply (and gently). Here are the basics you need to know.
But first, what is insurance?
It’s a form of risk management wherein you invest money in case of any loss, which could compensate for the equal value of that loss through monetary exchange. Let’s put it simply. Say you have a dollar (I know it’s not too much but it’s the idea that counts) and you put it on the table. You made yourself a snack, and when you get back to sit on the table, that dollar you put there was gone (No, your dog didn’t eat it!). You feel disappointed, or even sad because you think there’s absolutely no way to get it back. This is where insurance saves the day!
It gives you the guarantee that what you lost, you get in return, granted that the rules/terms of the insurance applies to your situation. It first became a primary strategy for businesses since it ensures that things can flow smoothly through anticipating losses in the future and gaining monetary compensation depending on the losses. But through the years, it has changed the face of risk management and it no longer applies to business. Individuals have made it their priority to secure this unique form of investment.
Types of Insurance
There are different types of insurance that have various coverage and benefits for different fields and practices. Each type of insurance covers different causes and has various offers. This includes the following:
This is the most widely used type of insurance all over the globe. This redefined the healthcare industry. Years ago, medical care only seemed a viable option for those who can afford it. Thanks to health insurance, most can now avail health care. This policy covers medical costs and services one needs when seeking check-up, hospitalization, surgery or even lifetime treatment. In many countries, health insurance is freely provided by the government through people’s taxes.
Being one of the most popular forms of policies today, this covers the losses related to automobiles, usually meant for cars. This covers the damages to property, health costs, and liability costs when the insured vehicle is involved in an accident. Today, a purchase of a vehicle often comes with a free auto insurance for a certain amount of time.
This covers the costs and brings monetary benefits to the family or any beneficiary deemed by the decadent or the deceased person. Life insurance can be paid in a large sum of single payment or through annual payment. This can cover burial fees, funeral fees, and other expenses that the family of the deceased may incur during this time. Though death can be a taboo topic for some, it really doesn’t hurt to prepare for the known inevitable.
This type of insurance protects properties from risks such as fire, weather conditions, or theft. Property insurance has a wide range of coverage which includes aviation insurance, builder’s property insurance, boiler insurance, flood insurance, home insurance, and fire insurance just to name a few. Oftentimes, making home purchases entail several forms of insurance.
This policy offers protection when it comes to legal issues that may risk or bring losses to a particular body or type of business. Liability insurance can cover a lot of things like the harm that a car accident brings to a property or person, and the damages when someone gets into an accident in a person’s property.
This policy secures income for anyone who loses the ability to do their job and earn money because of a disability. More popular in celebrities, and a more specific coverage of this policy is the body part insurance. True to its word, you only insure a certain body part. Ben Turpin, famous actor and comedian, was believed to have insured his crossed eyes for $20, 000 if in any case, they become uncrossed.
Insurance signifies security and assurance. It guarantees that you are protected, or that you can bounce back. Yes, you can’t hope to be Nostradamus. You may not see what’s going to happen, but you can certainly prepare yourself for it.
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