What are the different types of insurance?

What are the different types of insurance?

Nowadays, people prefer to fulfill their immediate “needs” and tastes instead of seeking for stability in the future while protecting their patrimony, life and health. A clear example is the purchase of gadgets. In this technological age, people are interested in having the latest luxury cell phone and all its accessories; however, few people have realized that, with what they spend on these devices they could buy life, health or car insurance, among many others.

We are all exposed to randomly occurring unforeseen events, illnesses, accidents, etc.. When things happen it is imperative to have insurance in order to diminish the loses.

An insurance is nothing more than a contract by means of which, the Insurer, in exchange for a fee called “premium”, will take care of the damages that “may” happen to certain objects predetermined by the Insured, in the event of any of the described incidents and agreed in the policy.

When buying an insurance, we must take into account what type of insurance we want to hire based on our personal or professional needs. Insurance companies offer many types of insurance. Everyone knows the car, home or life, among others. But there are many more that you may not know.

To start knowing them, keep in mind that insurance is classified into three types: personal, damage or property and, finally, service provision. Within each category you can find a lot of variety, as well as the risks they cover.

Personal insurance: life, personal accidents, health or illness, dependency and pension plans

Insurance or property damage (liability): fire insurance, civil liability, automobile, agricultural, pecuniary losses, theft, credit and surety, transportation, engineering and multi-hazards.

Insurance of service provision: legal defense, travel assistance and deaths.

Personal life insurance provides money to the family of the insured in case he or she dies or suffers from total and permanent disability due to accident or illness. There are three types, those of death, survival and mixed. In those of death, also known as risk insurance, if the insured dies before the end of the contract, the contracted amount is paid to the designated beneficiaries. If you do not die, the insurer does not pay any consideration. They also cover, as an option, disability or accidents.

In those of survival (normally denominated of saving), if the insured one lives, this collects the stipulated amount. They stand out for their advantageous tax treatment. Here are four types: Insured Pension Plans, specific savings product for retirement, Individual Systematic Savings Plans, annuities and “linked to units of account”.

In mixed life insurance, “the insurance company guarantees the payment of a capital to the beneficiaries upon the death of the insured, or to the expiration of the insurance if the insured lives on that date”. These insurances combine the two previous modalities, a death or risk insurance and a survival or savings insurance. They can be contracted in different modalities: complete, double, revalueable, simple or variable.

As you see, the world of insurance is precisely that; a world! So we start this good (hopefully) article about the different types of insurance there are. Trying to explain all the types of insurance available on the market is a very difficult task, we just tear the surface with the personal insurance.