Types of Insurance

Types of Insurance

There are mainly 7 types of Insurance

1. Life Insurance or Personal Insurance.
2. Property Insurance.
3. Marine Insurance.
4. Fire Insurance.
5. Liability Insurance.
6. Guarantee Insurance.
7. Social Insurance.

Life Insurance or Personal Insurance.

Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policyholder). 

Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policyholder typically pays a premium, either regularly or as one lump sum. Other expenses, such as funeral expenses, can also be included in the benefits.

Property Insurance.

Property insurance is a policy that provides financial reimbursement to the owner or renter of a structure and its contents in the event of damage or theft. Property insurance can include homeowners insurance, renters insurance, flood insurance and earthquake insurance.

Marine Insurance.

Marine insurance protects from business losses incurred during water transport operations. While policies vary there are four standard types: hull, cargo, freight revenue, and negligence.Fire Insurance.

Liability Insurance.

Liability insurance is insurance that provides protection against claims resulting from injuries and damage to people and/or property. Liability insurance policies cover both legal costs and any legal payouts for which the insured would be responsible if found legally liable.

Fire Insurance

Fire insurance is property insurance covering damage and losses caused by fire. The purchase of fire insurance in addition to homeowner's or property insurance helps to cover the cost of replacement, repair, or reconstruction of property, above the limit set by the property insurance policy.

Guarantee Insurance.

A financial guarantee is a non-cancellable indemnity bond backed by an insurer to guarantee investors that principal and interest payments will be made. Many insurance companies specialize in financial guarantees and similar products that are used by debt issuers as a way of attracting investors.

Social Insurance.

Social insurance is any government-sponsored program with the following four characteristics:

• the benefits, eligibility requirements and other aspects of the program are defined by statute;
• explicit provision is made to account for the income and expenses (often through a trust fund);
• it is funded by taxes or premiums paid by (or on behalf of) participants (but additional sources of funding may be provided as well), and
• the program serves a defined population, and participation is either compulsory or so heavily subsidized that most eligible individuals choose to participate.

Social insurance has also been defined as a program whose risks are transferred to and pooled by an often government organisation legally required to provide certain benefits.