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Insurance

Insurance is a form of risk management mainly used to hedge against the risk of a contingent loss. Insurance is thus defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. A company who sells insurance is called insurer. Insurance premium is determined using insurance rate as a factor.

Types of insurance:

• Health insurance policies often cover the cost of medical treatments, partially or fully, depening on the policy. Health insurance includes private health insurance, universal access to health care, dental insurance.
• Disability insurance policies provide financial support in case the policyholder is unable to work due to disability or injury. Typical disability insurance policy provides monthly support to help pay such obligations as mortgages and credit card debts.
• Casualty insurance policies insures against accidents, not necessarily tied to any specific property.
• Life insurance policies provide monetary benefits to insured persons’ designated beneficiaries, such as income loss benefits, burial, funeral and other final expenses. Generally, life insurance companies pay the beneficiary either a lump sum cash payment or an annuity, depending on the policy.
• Property insurance provides protection against risks to property, such as fire, theft or weather damage. Property insurance includes auto insurance, Home Insurance, Crop insurance, etc
• Liability insurance policies cover legal claims against the insured. Typical examples of this policy are auto insurance liability insurance, professional liability insurance.
• Credit insurance policies repay some or all of an insured loan back when a borrower gets into certain situations such as death, unemployment, disability.
• Travel insurance policies, designed especially for overseas travel, cover certain losses such as medical expenses, personal belongings, travel delays, personal liabilities, etc.  while on such tours.
• Unemployment insurance, also called employment insurance in some countries, is generally a state run insurance, which provides temporary income for eligible workers who become unemployed through no fault of their own.