The Basics of Insurance

The Basics of Insurance

Definition

In a simple meaning, insurance is a way to protect yourself or your assets from financial lost. It’s a contract between two parties where one party would pay for the loss of the other party caused by certain events agreed within the contract.

How Insurance Works

The main principal of insurance is sharing losses. So if you want to be covered for your loss, you must agree to make regular payments, which are called premiums to the insurance company. The company will then give you a policy stating that they will cover with conditions as agreed in the policy.

Types of Insurance

There are so many types of insurance, including some insurance bought to cover unusual “assets” like legs, breasts, nose, or lips that usually sold to celebrities. However, in general there are three kinds of insurance; Life insurance, Private health insurance, and Property & Liability insurance.

1. Life Insurance

Life insurance guarantees that the insurance company will pay certain amount of money if the insured person dies. The payment can be done in a lump sum or with installments to the people named by the policyholder as the beneficiary. There are many different types of life insurance, including the one that also works like a savings account, so the policyholder can actually save money. This type of life insurance policy has a cash value and if needed, the policyholder can borrow money or exchange the policy for cash.

2. Private Health Insurance

This is the type of insurance that will cover all or part of the medical care cost. Lately it has become quite popular as the cost of medical care keeps rising. Without health insurance a person can easily suffer a terrible financial hardship, especially when a serious illness that requires a long and expensive medication occurs.

3. Property and Liability Insurance

This type of insurance is purchased by businesses and individuals to protect their assets from financial loss. Property insurance will cover financial loss of policyholders in case their assets are lost or damaged. While liability insurance will cover the financial loss of policyholders against third party liability.

Financial Stability of Insurance Company

People buy insurance to manage risks related to financial losses. Insurance companies as the party who responsible for these losses in the end should have a good financial stability. That’s why it’s important to choose a good insurance company before you decide to buy insurance policy, to make sure all you are secured from any possible financial losses in the future.

Read more

Protection During Your Trip With Travel Insurance

Protection During Your Trip With Travel Insurance

Most people still confuse about whether travel insurance is considered a necessity or a luxury. Usually they think that doing a travel is already expensive so they want to save money on unnecessary expenses, including travel insurance. But is it true that travel insurance is unnecessary?

First of all, you don’t what could happen to you during your journey, which knows that you might get seriously ill. Some people think, that they don’t have to worry because they already have health insurance. But did you know that your health insurance may not be able to cover all your medical expenses when you’re travelling abroad? And usually the amount that you have to cover from your own pocket is quite large. There will be lots of limitations on your current medical plan when you’re travelling abroad, so it would be risky if you just rely on it. Therefore, travel insurance is an important thing for you to have before you go on your journey.

Buying a Travel Insurance

You should be patient and consider your options carefully when you shop around to get a a travel insurance, because some of them can be really expensive. If you just do your research and get quotes from several different insurance companies, you will see that you can get a much cheaper rate with pretty much the same coverage as the expensive ones.

Here are some useful tips when you’re buying travel insurance

– Some health insurance plan can actually cover all your medical expenses while you’re abroad, so check with your current insurance provider to make sure before you buy a travel insurance.

– If you think you are financially capable to handle the worst case scenario, then you probably don’t need to buy a comprehensive policy.

– Consider a sufficient dental medical and coverage, as well as emergency medical evacuation coverage, especially if you plan to visit a country that doesn’t likely to have good medical care facilities.

– If you travel often, consider buying annual travel insurance, it will be much cheaper.

– Get enough information and make sure you understand about the insurance coverage before you buy.

– Don’t buy from your travel agent or airline, they probably only have one insurance product available so you won’t have other (better) options.

Read more