 |
|
 |
Insurance - All The Basics |
By:
D. David Dugan |
|
|
|
|
|
<%''a href="http://www.makepeoplebuy.com/internetlegends/" rel="nofollow" target="_blank">
|
Log in to use the QuickCopy tool.
You can copy this article fast!
|
|
What is insurance?
Insurance is a means of providing protection against financial loss in a great variety of situations. It is a contract in which one party agrees to pay for another party’s financial loss resulting from a specified event.
Insurance works on the principal of sharing losses. If you wish to be insured, against any type of loss, agree to make regular payments, called premiums, to an insurance company. In return, the company gives you a contract, the insurance policy. The company promises to pay a certain sum of money for the type of loss stated in the policy.
History
Insurance is thousands of years old. The Code of Hammurabi, a collection of Babylonian laws of 1700BC, is believed to be the first form of credit insurance. A borrower did not have to repay a loan if personal misfortune made it impossible to do so. Insurance as we know it today can be traced to the Great Fire of London in 1666, which devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings.
Types of Insurance
Insurance generally covers situations involving pure risk – that is, situations in which only losses can occur. Such situations include fire, floods and accidents. People also buy insurance to cover unusual types of financial losses like, a dancer might insure her legs against injury. There are mainly three types of insurance policies sold:
1. Life Insurance
A life insurance policy provides that the insurance company will pay a certain amount when the person dies. This may be paid in a lump sum or in installments to the beneficiary [people named by the policyholder to receive the death benefit]. Some types of life insurance policies also enable policyholders to save money. Such policies have a cash value. A policyholder may borrow money against the cash value or surrender the policy for its cash value.
Annuities
These are savings plans sold by insurance companies to provide a fixed and regular retirement income. If the annuitant [owner of the annuity] dies before receiving the guaranteed number of payments, the insurance company must continue the payments to the beneficiary.
Dividends
Some insurance policies refund part of the premiums in the form of dividends. Such policies are called participating policies. An insurance company pays dividends if the money it collected in premiums exceeds the amount needed to pay benefits and administrative costs. Dividends may also include a share of the profits the company earned on investments made with premium funds. Dividends are most commonly paid on life insurance.
2. Private Health Insurance
Health insurance pays all or part of the cost of hospitalization, surgery, laboratory tests, medicines, and other medical care. The rising cost of medical care has increased the need for adequate health insurance. You could suffer a major financial hardship without such coverage, especially in case of a serious illness or accident.
Dental insurance is one of the fastest-growing types of health insurance. It helps pay for a wide variety of dental services.
3. Property & Liability Insurance
Individuals and businesses buy property and liability insurance to protect their assets against financial loss. Property insurance provides direct compensation if a policyholder’s possessions are damaged, destroyed, or lost as a result of perils. Liability insurance protects individuals and businesses against possible financial losses if their actions result in bodily injury to others or in harm to property owned by others.
The main types of individual coverage are:
• Homeowners Insurance
This provides protection against losses from damages to an owner’s home and its contents.
• Automobile Insurance
This is the most widely purchased and most important kinds of insurance. Drivers are legally responsible for any costs arising from accidents they cause. This insurance protects a policyholder against financial losses from accidents.
Financial viability of Insurance Companies
Financial stability and strength of the insurance company should be a major consideration when purchasing an insurance contract. An insurance premium paid currently provides coverage for losses that might arise many years in the future. For that reason, the viability of the insurance carrier is very important. In recent years, a number of insurance companies have become insolvent, leaving their policyholders with no coverage (or coverage only from a government-backed insurance pool with less attractive payouts for losses).
How Insurance Is Sold
Most insurance companies sell policies through agents. Exclusive agents are employees of an insurance company who sell only that company’s policies. Independent agents sell policies for several companies.
About the author
David Dugan is a contributing author to the insurance information site http://insurance.divinfo.com/, a site that has information on auto, homeowners, life, pet and many other kinds of insurance as well as the retirement site http://retirement.divinfo.com.
Article Source: Free Article Directory - http://www.articleManiac.com Search And Submit Articles
Log in to use the QuickCopy tool. You can copy this article fast!
|
|
|
|
|
|
|
 |
 |
 |
 |
| Phrase |
# Count |
% Density (approx) |
insurance
| 47
| 5.85
| policies
| 9
| 1.12
| company
| 9
| 1.12
| financial
| 9
| 1.12
| losses
| 8
| 1.00
| of insurance
| 6
| 0.75
| insurance company
| 6
| 0.75
| types of
| 6
| 0.75
| the insurance
| 6
| 0.75
| types
| 6
| 0.75
| an insurance
| 5
| 0.62
| pay
| 5
| 0.62
| companies
| 5
| 0.62
| coverage
| 5
| 0.62
| insurance is
| 4
| 0.50
| life insurance
| 4
| 0.50
| insurance companies
| 4
| 0.50
| health insurance
| 4
| 0.50
| the insurance company
| 3
| 0.37
| an insurance company
| 3
| 0.37
| type of loss
| 2
| 0.25
| against financial loss
| 2
| 0.25
| of insurance companies
| 2
| 0.25
| kinds of insurance
| 2
| 0.25
| individuals and businesses
| 2
| 0.25
| types of insurance
| 2
| 0.25
|
|
|
|
| |
|
|
For most of us, insurance coverage represents a love-hate relationship. We hate paying for the premiums, but love having the right kind of coverage when it is needed. We realize that is important to have insurance coverage, but just the tho...
(read entire article)
Added : Saturday, October 7th, 2006 Viewed : 166 Times | |
|
|
Most aspects of capitalism is win-win. If employers make a lot of money from workers due to increase of workers productivity, those employers will hire as many workers as possible -- increasing workers' salary.
Hence, in most aspects of ...
(read entire article)
Added : Thursday, November 23rd, 2006 Viewed : 220 Times | |
|
|
Some strategies on finding affordable health insurance in Florida.
I've been a health insurance agent since 1985. I help Connecticut residents find health insurance and have for the last several years have also managed a website that hel...
(read entire article)
Added : Wednesday, April 11th, 2007 Viewed : 190 Times | |
|
|
Any reported accident, even if there was no damage at all, stays on your insurance record for six long years, seriously impacting your insurance rates.
(read entire article)
Added : Sunday, October 7th, 2007 Viewed : 62 Times | |
|
|
Some strategies on finding affordable health insurance in Florida.
I've been a health insurance agent since 1985. I help Connecticut residents find health insurance and have for the last several years have also managed a website that hel...
(read entire article)
Added : Thursday, May 17th, 2007 Viewed : 114 Times | |
|
|
Term life insurance provides a great amount of protection against the death of an individual, but only for a given period of time. This is one of the best possibilities for insurance coverage if you are simply looking for coverage on a shor...
(read entire article)
Added : Monday, March 24th, 2008 Viewed : 89 Times | |
|
|
Disability insurance is one of the most overlooked types of insurance. People will provide insurance for their cars and their property, but they often overlook the risks of everyday life on their families. Disability insurance provides you with funds
(read entire article)
Added : Thursday, October 9th, 2008 Viewed : 21 Times | |
|
|
Obtaining insurance quotes offline is a real drag. You can spend hours on the telephone repeating your details to life insurance or household insurance telesales operators in a bid to find the lowest quotes available. It is a time consuming...
(read entire article)
Added : Thursday, November 30th, 2006 Viewed : 246 Times | |
|
|
Almost everyone needs life insurance. Whether it’s to pay off debts, ensure the family income and standard of living, make sure college can be paid for, leave a bequest to charity, provide liquidity for a business or real estate, or hedge a...
(read entire article)
Added : Monday, April 30th, 2007 Viewed : 52 Times | |
|
|
Purpose of Life Insurance
If you die, life insurance is designed to provide financially for those you have left behind and have listed as your beneficiaries. In buying life insurance you, the insured, enter into a legal contract with the...
(read entire article)
Added : Saturday, November 25th, 2006 Viewed : 171 Times | |
|
|
|
|
|
|
| Official Member Gear | Links
