Types of Insurance | 7 Types of insurance companies

Types of Insurance

There are many types of insurance. But the most known are given here;

1) Life/Personal Insurance

In this type of insurance, the Insurer will pay you the fixed amount of insurance money at the time of death or at the expiry of a certain period. Most of the people do life insurance and it is a very common and extensively growing category of insurance. Nowadays, life Insurance enjoys maximum scope in this insurance sector because life is the most important property of an individual or human being.

Life insurance provides protection to the family at premature death or gives an adequate amount at the time of old age when the earning capacities are reduced.

2) Health Insurance

In this type of insurance, when you do health insurance, the insurance company or insurer usually cover your following types of expenses when you become ill and hospitalized

Insurer usually covers;

• All hospitalization expenses will be covered by the insurer.
• The treatment and test expenses will be covered. Your diagnostic bills prior to post-hospitalization.
• All daycare procedures like cataract operations will be covered.

What’s not covered?

• If you hospitalized due to war or any other related activities
• If your medical condition disturbed due to abuse of alcohol or drugs, then the insurance company will cover your medical expenses.
• Any medical condition due to pre-existing disease during the waiting period, the disease you have not mentioned during the purchasing of health insurance where you to mention all the disease against you have done your health insurance.
• The diagnostic charges if the reports do not confirm the existence of the covered disease.
• Self-inflicted injuries, if you have to do self-inflicted injuries to your body then, the insurer will not pay those medical expenses.

3) Property Insurance

In property insurance, the persons insure their property against a certain specified risk. The risk can result from damage and destruction due to climatic disaster, theft of property or goods, damage to property because of some accident.

4) Automobile Insurance

Automobile insurance is the insurance of vehicles like cars, trucks, motorcycles, and any other type of vehicle.  In this type, the insurer provides protection against the physical damage or bodily damage or injury resulting from a traffic accident, the vehicle protected against any liability that could also arise from incidents inside the vehicle.

Example

• Insurance rates are defined by Insurance companies according to their services
• The average rate of CAR insurance can vary between 2 to 3 %
• For example, if HONDA CIVIC 1.8 cc is Insured by Jubilee Insurance company
• Type of  Car                                          Honda
• Car Model                                Honda Civic 1.8 CC
• Year of Registration                                2018
• Current Value (PKR)                        Rs. 32,00,000/-
• Tracker Installed?                                     NO

Calculation

• INSURER                                         Jubilee General Insurance
• PLAN NAME                       Jubilee Comprehensive Auto Insurance
• Policy Type                                               Comprehensive
• Premium Rate                                                  2.25 %
• Annual Premium                                          Rs. 72,000/-

This Comprehensive Policy covers;

• Accidents: Common damages to your own car like accidents & collisions
• Theft: If unfortunately, your car gets stolen
• Fire: Common damages due to Fire
• Natural Disasters: Damages due to any natural calamities
• Personal Accident: If there is a car accident and unfortunately it leads to death or disability of the owner
• Third-Party Losses: Damage your car causes to someone else’s car or any other property

What’s not covered?

• You drive as drunk or without a valid driving license.
• You hold a learner’s license and were driving without a valid driving license-holder in the front passenger seat.
• Any consequential damage or which is not a direct result of the accident
• Any contributory negligence (e.g. damage due to driving a car in a flood etc..)

5) Marine Insurance

In this type of insurance, Marine Insurance provides protection and safety against the loss of marine perils. The Marine perils may be a collision with a rock or slip, attack by enemies, fire and captured by pirates, etc. These perils and risks cause damage, destruction, and disappearance of the ships or cargo and non-payment of freight

6) Fire Insurance

• With the help of fire insurance, the losses arising due to fire compensated
• The individual preferred from such losses and his property or business or industry will remain approximately in the same position in which it was before the loss.
• The fire insurance does not protect only losses but certain consequential losses also war risk, turmoil, riots, etc. can be insured under this insurance, too.

7) Travel Insurance

Travel insurance is also a growing sector of insurance. People insured themselves from any type of risk and loss. Particularly the people which travel mostly by air . They want this type of insurance, so that, they do not have to face any problem related to flights delayed, losses of baggage and passports or other documents. It includes the following factors

What all does travel insurance usually cover?

• Loss of baggage
• Emergency medical expenses
• Loss of passport
• Hijacking
• Delayed flights
• Accidental death

Also, Read;

What is Insurance and Insurance premium?

Important Functions of Insurance |Primary and Secondary functions of Insurance