Four Basic Types of Insurance IN UK
This article will help you understand the true meaning of the word insurance in a detailed and comprehensive way. Moreover, you will learn types of insurance in detail, each one along with its details and benefits. Let us start with a simple definition of insurance. Insurance is protection from any kind of financial or health loss as long as the loss could be compensated financially. You may have heard about the risk management technique. Insurance is basically a risk management technique. Through insurance, the insurance holder (sometimes called the policyholder) manages the financial risks. The person or insurance company that provides the insurance is called the insurer or insurance carrier. On the other hand, the person who claims that insurance is called a policyholder.
Reading the article this far you have learned the basic terms of insurance along with its definition. Let us study how insurance actually works. The process of insurance involves transactions. The person who buys insurance (the policyholder) pays a small amount of money to the insurer in exchange for the insurer’s promise to cover his financial loss. The policyholder has to pay that small amount regularly after a certain period of time. The insurer plays his part whenever the policyholder suffers from a loss. But the loss should be reducible to financial terms.
There are many types of insurance that one may get tangled between them all. The reason behind this complexity is that; firstly there are main types of insurance you may have heard of. But there are further subtypes of each type, which creates complexity. For example, let’s say home insurance; home insurance generally includes a claim to property damage, damage to the owner’s belongings and in some countries, insurance also provides the medical expenses of the guests if they are hurt on the owner’s property. Due to this complexity, one can face difficulties in choosing which insurance policy is best for him. Quote Radar is the best online platform that provides insurance quotes. These insurance quotes help to compare different insurance policies so that a person can select the best one. Different types of insurance along with their benefits are discussed here:
Life insurance is a whole lot different from the other ones because here the subject is a person’s own life. But shockingly it is the most famous type of insurance in the world today. Because of the most important property a person keeps in his own life. Life insurance actually works in a very simple manner. The person holding insurance pays a small amount of money to the insurance firm throughout his job life. And once he gets retired the insurance company pays him off. The benefit of life insurance is that it provides safety for the family if a person dies an early death. In case of accidental death, the insurance company will pay for his funeral. The rest of the money will be provided to the family of that person. In this way, you can say that life insurance actually works a quite like pension.
In many countries including the UK, the law says that money for life insurance is not taxable. Due to this law, many people use life insurance as a money-saving process moreover, it provides services in case of early death.
Automobile insurance covers two subtypes of insurance. First of all the benefit, it includes is damage to the vehicle you are using in case of an accident. Secondly, it also includes the payment for vehicle theft cases. Moreover, some of the insurance companies also provide medical benefits under this category. In case of an accident, the medical expenses are provided by the company under automobile insurance. Due to these benefits, automobile insurance is also very popular among people.
As discussed earlier a person’s life is the most important property he owns. To ensure the safe transfer of money to their families and themselves people use life insurance and medical insurance. Medical insurance provides a safe transfer of money to the policyholder in case of an accident or any misshape. It also covers dental medications so that the policyholder can be paid through medical insurance in case of any dental medications. In the developed countries like the US and UK, the government provides its citizens with health and medical insurance. In most countries, medical insurance is provided to the employer by the firm in which he works.
Business insurance is the fourth most famous insurance among people because everyone wants to run his business in peace. Business insurance is a general category that further includes fire insurance in which the insurance company pays off in case of any fire broke out at the business site. Moreover, it also includes benefits in case of terrorism or riots, etc.