Ariion Kathleen Brindley


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This is an explanation of 9 types of insurance

by

Ariion Kathleen Brindley





1. Health Insurance

Hospital ward at Ellis Island

Photo credit: Eugenics Archive




Health insurance is insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a government-sponsored social insurance program, or from private insurance companies. It may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. In each case, the covered groups or individuals pay premiums or taxes to help protect themselves from high or unexpected healthcare expenses. Similar benefits paying for medical expenses may also be provided through social welfare programs funded by the government.



By estimating the overall risk of healthcare expenses, a routine finance structure (such as a monthly premium or annual tax) can be developed, ensuring that money is available to pay for the healthcare benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity.

Story credit: Wikipedia





2. Auto Insurance

Man crashes car through the roof of his house

Photo credit: Gizmodo


All insurance provides protection to consumers by covering certain risks and promising to pay for financial losses caused by these risks.

Auto insurance is one of the most used types of personal insurance. Most states require that you purchase some kind of insurance coverage to drive legally in the state. Auto insurance can be divided into two basic coverage areas: liability and property damage.

Liability

Most auto insurance policies contain three major parts: liability insurance for bodily injury, liability insurance for property damage and uninsured/under-insured motorists coverage.

Bodily injury liability insurance protects you against the claims of other people who are injured in an accident for which you were at fault. Their claims for bodily injury may include medical expenses, lost wages, and pain and suffering.

Property damage liability insurance pays for any damage you cause to the property of others. This includes not only damages to other vehicles, but also other property such as walls, fences and equipment. Uninsured motorists coverage protects the policy holder directly. This coverage pays if you are injured by a hit-and-run driver or a driver who does not have auto insurance.

Property Damage

Property damage coverage may include both collision coverage and comprehensive coverage.

Collision coverage pays for physical damage to your car as the result of your auto colliding with an object, such as a tree or another car. This coverage is optional and not required by law. However, collision insurance may be required by your lending institution or lessor. In the case of an accident involving an older car, the cost of repairing the car can quickly exceed the worth of the car. In this case, insurers will “total” the car and pay you what the car was worth rather than fixing it.

Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods and theft. Comprehensive coverage also will cover broken glass, such as windshield damage. You are not required by law to carry comprehensive coverage. Story credit: National Association of Insurance Commissioners NAIC



3. Life Insurance

this is a environmentally friendly oak casket

Photo credit: Environmental Caskets


Life insurance is protection against financial loss resulting from death. It is an insurance company's promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.

Why do I need life insurance?

Although you may not think about it, your ability to earn income is a significant asset and life insurance helps replace lost income in the event of your premature death. Here are some reasons people buy life insurance.





The death benefit may be used:

To replace income the family would need to maintain their standard of living after the death of a wage earner. To pay off a mortgage loan and other personal and business debts or to create a rent fund. To create a fund for children's education. To pay final expenses, such as funeral costs and taxes. To create a family emergency fund or a fund for a family member with special needs.

Story credit: State Farm Insurance





4. Dental Insurance

Dentist working on a woman

Photo credit: Doctors Hangout


What is dental insurance for individuals?

Dental plan coverage for individuals is not commonly offered because dental needs are highly predictable. For example, you would not pay premiums for your dental coverage if the premiums were more expensive than the cost of the dental treatment you need. Since this is the case, insurance companies would stand to lose money (spend more on benefits than they receive in premiums) on every individual dental plan they write.

There are, however, a few companies that offer a form of dental benefits for individuals. Most of these plans are "referral plans" or "buyers' clubs." Under these types of plans, an individual pays a monthly fee to a third party in return for access to a list of dentists who have agreed to a reduced fee schedule. Payment for treatment is made from the patient directly to the dentist. The third party acts only in the capacity of matching the individual to the dentist. The dentist receives no payment from the third party other than in the form of referral of patients.

What are some questions and concerns about dental benefits?

Your plan sponsor (often your employer) should be able to explain the individual design features of your plan. Design features to understand include: exclusions, limitations, patient copayments and annual or lifetime benefit maximums.

The American Dental Association has received numerous questions and complaints from patients regarding their dental benefits. To correct some of this confusion about dental coverage, the following questions and answers are provided by the American Dental Association to help you better understand your dental benefits. If you have additional concerns or questions, they should be directed to your group benefits department. Your personal dentist may also be able to explain dental benefit issues and options for you.

My dentist recommends a treatment that my plan will not pay for. Does this mean the treatment really isn't necessary? It is common for dental plans to exclude treatment that is covered under the company's medical plan. Some plans, however, go on to exclude or discourage necessary dental treatment such as sealants, pre-existing conditions, adult orthodontics, specialist referrals and other dental needs. Some also exclude treatment by family members. Patients need to be aware of the exclusions and limitations in their dental plan but should not let those factors determine their treatment decisions.

My dentist recommends that I get a crown on a tooth, but my dental benefit will only pay for a large filling for that tooth. Which treatment should I have? Some plans will only provide the level of benefit allowed for the least expensive way to treat a dental need, regardless of the decision made by you and your dentist as to the best treatment. Sometimes, special circumstances may be explained to the third-party payer to request an adjustment to this lower benefit allowance, but there is no guarantee that the third-party payer will alter its coverage. As in the case of exclusions, patients should base treatment decisions on their dental needs, not on their dental benefit plan.

Story credit: American Dental Association






5. Travel Insurance

Huge aircraft ready for take off

Photo credit: Sonny Radio


Why do I need travel insurance?

You can begin your trip without any travel insurance and be self insured. But did you know that if you become ill abroad the costs to treat you could be very high. How would you find a doctor? Where would you find appropriate healthcare facility? Where would you seek advice? Did you know that HMO's, PPO's and Medicare typically do not cover you abroad?


Travel Protection vs Travel Medical

Most Travel Protection Plans will also include Travel Medical Insurance, Medical Evacuation, Trip Cancellation/Interruption, Travel Delay, and Baggage coverage. Travel Medical insurance plans generally just reimburse you for medical expenses incurred while traveling. What Countries are considered High Risk for Travel?

Area 1 Risk: Afghanistan, Chad, Chechnya, Democratic Republic of Congo, Iraq, Israel - incl. West Bank & Gaza, Ivory Coast. Somalia, Sudan

Area 2 Risk: Algeria, Burundi, Central African Republic, Colombia, East Timor, Ethiopia, Guinea, Haiti, India - Jammu & Kashmir, Iran, Lebanon, Liberia, Nepal, Nigeria, Saudi Arabia, Yemen, Zimbabwe


What is Co-Insurance or Co-pay?

This is the percentage or amount of expenses that the insured pays (if any) after the deductible is paid. Example: "Co-Insurance = 20% or co-pay is 80/20" means that the travel insurance company pays 80% of the charges, the insured pays 20%

Story credit: Travel Insurance Center






6. Pet Insurance

Little girl holding a tarantula

Photo credit: The BBC


What is pet insurance? Pet health insurance helps you pay your veterinary bills for your dog or cat. It can help make sure you never have to choose between your pet's well-being and your personal finances.


What does it cover?

You can cover your pet for accidents and illnesses. With ASPCA Pet Health Insurance, you can also choose plans that cover wellness care like check-ups, vaccinations, and dental cleanings. For example, our Advantage PlanWC can help you pay for basic wellness care, while our Premier PlanWC+ offers even more wellness care coverage.


Why do I need it?

As veterinary care becomes more sophisticated and expensive, pet health insurance offers valuable peace of mind. With ASPCA Pet Health Insurance, you'll have financial support to pay for the medical care your pet deserves.






What does pet insurance cost?

Pet health insurance can be very affordable. For instance, you can get basic accident coverage for as little as $7.50 a month. Your actual premium depends on factors such as the plan you pick and the breed and age of your dog or cat.


How does pet insurance work?

Get Treatment

Take your pet to ANY licensed vet in the US or Canada and pay for the services.

File a Claim

Fill out and send in our simple one-page claim form with any receipts.

Get Reimbursed

You'll get back 80% of allowable charges, after the $100 annual deductible is met.

Story credit: ASPCA






7. Homeowners Insurance

Large log cabin with stone drive

Photo credit: Log Home


What is Homeowners Insurance?

Different policies exist for renters, owners of mobile homes, people seeking bare bones coverage and those living in homes that are very old, but most homeowners will purchase what is called an HO-3 policy. This insurance policy covers your home and its contents against damage and theft, as well as you, the owner, against personal liability if someone is injured while on your property. This coverage also includes damage caused by pets and most major disasters, though floods and earthquakes require separate policies. Homeowners insurance does not cover problems that result from poor maintenance or general wear and tear. A basic homeowners insurance policy should also cover other structures on your property and should provide for living expenses in case you are not able to live at home after a fire or other insured disaster. The amount of coverage provided for each of these items varies depending on the insurer and the type of policy.

One of the first things you need to know about your policy is the liability limit. The liability limit determines how much coverage you have should something happen to your home. These limits usually start at $100,000, but policies can be purchased with much higher limits. Most experts recommend that you have at least $300,000 to $500,000 of coverage, depending on the value of your home.

When someone talks about the amount of coverage they have, or their liability limit, they are probably referring to the coverage for their home -- that is, for the amount of money it would cost to rebuild their home given the price of materials and labor in the area. This amount is not the same as the purchase price of your home, which accounts for factors like the value of the land. A quick estimate of your rebuilding cost can be done by multiplying your home's total square footage by the building cost per square foot

While your liability limit is a reflection of the amount of coverage for your actual home, other structures on your property, such as a garage, are usually covered for 10 percent of that amount. Coverage for personal belongings usually falls somewhere between 50 percent and 70 percent of the amount of coverage on the structure of the home. And, as mentioned earlier, in case you have to live somewhere else because of damage to your home, most plans cover costs of living away from home -- hotel, restaurants/food, etc. -- up to 20 percent of your home's liability limit. Other policies may provide unlimited coverage for living expenses but only for a limited period of time.

Another option you'll probably be asked to consider is replacement cost versus actual cash value. Here's where you'll really want to consider the contents of your home. Let's say, while you're not a complete luddite, by comparison to most current homeowners, the amount of electronic gadgets in your home is pretty small. You have a television that's almost as old as you are and you wouldn't miss it if it were gone. You also have an inexpensive stereo and the computer you use is an old loaner laptop from work. So which option is right for you? Going with actual cash value would mean that if these items were damaged, you'd get an amount of money equivalent to the current value of those items (accounting for depreciation). The laptop is covered through work; you won't need to replace that. And since you don't really care about the television, you could simply take the money you get and just get a new, cheap stereo. Meanwhile, your neighbor has everything a home theater should have - a plasma TV, a surround sound speaker system, DVD player, etc. in both her living room and the family room. With that kind of equipment, she'd definitely want to consider replacement cost coverage, which pays for a new version of the item that was lost or damaged - there's no accounting for depreciation. Obviously, in the case of electronics, which can depreciate in value rapidly over time, a replacement cost policy can be a big advantage. However, this isn’t the only scenario that calls for this option. Let’s go back to your household contents. There are other types of items to consider when making this decision. For example, what about the collection of signed prints you have? And there’s also the stamp collection and those original, signed Pearl S. Buck manuscripts. Original pieces of artwork or other costly collectibles can be just as, if not more, valuable than today’s pricey electronics. Replacement cost coverage is usually 10 percent more expensive than actual cash value coverage, but under the right circumstances, it's definitely worth the extra coverage.

Story credit: How Stuff Works






8. Unemployment Insurance

Unemployed man and and soup line

Photo credit: Franklin Delano Roosevelt Memorial


What is unemployment insurance?

Unemployment insurance is a temporary source of income. If an eligible person loses his job, he will be able to receive weekly payments thanks to money that was paid to his unemployment fund by his employer, via payroll taxes, while he was still gainfully employed. If eligible, a person can receive unemployment insurance once all of the proper paperwork is filed. Unemployment insurance is not retroactive, so it would not be in one's best interest to procrastinate. You're paid only from the day you file.

In most cases, a worker is eligible for unemployment insurance immediately upon being terminated from his place of employment. The termination has to be the decision of the employer, however. If an employee quits or resigns of his own accord, he is ineligible for unemployment unless there were extenuating circumstances. These circumstances will have to be proven before unemployment insurance can be paid. In addition, a person who had been employed for less than three months before being terminated is also ineligible. If an employee was fired because of misconduct or damage to company property, he might also be considered ineligible.

There are other situations in which a person is ineligible for unemployment insurance. For instance, someone who is self employed can't collect unemployment, nor can someone who is not a citizen and wasn't legally employed. If your hours have been cut, you may be eligible for partial unemployment. Also, if you lost your job because of damage to your place of employment by fire or forces of nature such as a flood or hurricane, you might be eligible for unemployment insurance, even if you didn't work the requisite three months.

It used to be that those wishing to receive unemployment insurance payments had to put in a weekly or monthly appearance at the unemployment office not only to file the proper papers, but to prove they were seeking employment. Now this can be done over the phone or even online. Check your state's guidelines to see if you need to appear in person to collect unemployment insurance.

If your employment has been terminated, check with your local Department of Labor to learn how to apply for unemployment insurance. Thanks to the wonders of technology, your state may be set up so you can handle all unemployment matters over the phone or computer. This will save time so you can begin looking for a job right away and become an active member of the workforce once again.

Story credit: American Dental Association






9. Business Insurance

Woman running her own small business

Photo credit: Las Vegas Small Business Development Center


What is Business Insurance?

Most people are familiar with insurance for their personal home and automobile. This coverage protects you financially in case of an accident or disaster to your home or car. We are familiar with these types of insurance because it is natural for most people to realize that they would be unable to replace their home tomorrow if there was a fire or to replace their automobile if there was an accident.

The same principle applies to business insurance. The principle is one of risk. There are risks that, while they may never occur, are so destructive that it makes sense to plan ahead and manage the risk. In our personal lives these risks are often more easily foreseeable.

For our businesses, however, we often do not consider risk or believe that the risks cannot be managed and so we turn a blind eye hoping that nothing “bad” happens. Some business owners I have worked with believe that since their business is profitable with a positive cash flow they can take care of the disaster when it happens. They forget that if the business is not operating – there is no cash flow.

Business insurance is nothing more than spreading and managing the risk among many business owners. Insurance companies take in premium payments from many covered businesses, invest those payments, and create a pool of money to pay out to a covered business if that business has a covered loss. Over the last 300 years, insurers have developed mathematical models to determine what chance there is of a risk occurring and, in so doing, what premiums the insurer must charge to stay in business and make a profit. Over that same time, insurers have developed approximately eight to nine general categories of losses that seem to happen with more frequency. The insurers developed particular policies to address those types of losses.

Business insurance is a broad description that encompasses these different types of policies. Because there are so many different types of coverage it is confusing. But, at the very basic level, the concept is the same – the management of risk.

Story credit: American Dental Association












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