Introduction to Insurance
Insurances play a very vital part in our financial planning. It acts as a financial protector. An individual must have insurance to avoid financial risks. While health insurance, auto insurance, homeowners/renters Insurance, and Disability Insurance help you avoid financial risks life insurance on the other hand gives mental peace to you and your family members after the death of a policyholder.
Generally, premiums, deductibles, copayments, and coinsurance are the types of payment one must take into consideration before purchasing an insurance policy.
Types of Insurance
1. Health insurance: As medical inflation is rising at a very high pace; health insurance is very crucial to avoid financial risks. The health insurance industry is very big in the United States and holds billions of dollars of market cap. It is expected to grow around 3.85-3.95% between 2024-2032.
2. Auto insurance: Auto insurance gives you financial protection in case of an accident. It is mandatory to have auto insurance in most states. The auto insurance industry’s market cap was estimated at around USD 345 billion and is expected to reach approximately USD 361 billion in 2024 and is expected to grow at a CAGR of 4.72% by 2029.
3. Homeowners/Renters Insurance: Both of these insurances protect against unexpected events such as fire, theft, or other uncertain events such as Vandalism and smoke. Natural calamities such as Earthquake are not covered by most of the insurance companies.
4. Life Insurance: Life insurance is very essential and a must for every earning individual because it gives mental peace to the policyholder and their dependent. In case of an uncertain event like the death of an earning member life insurance protects against financial loss and completes the financial needs of your near and dear ones.
5. Disability Insurance: Disability Insurance protects against loss of income due to illness or injury of an individual. This type of insurance is mostly offered by an employer to employees. If an employee gets injured while working irrespective of the sector the employee is working in can get the benefit of this type of insurance.
6. Usage-Based Insurance: As the word suggests usage-based insurance policies revolve around the usage of a particular commodity such as a vehicle. There are some insurance companies (especially in the auto insurance industry) that offer this type of insurance. Usage-based insurance analyses how you drive your vehicle and its cost directly associated with the driving behavior of an individual.
7. Cyber Insurance: Rarely, something bad happens online these days such as online theft but it is not impossible either. Cyber insurance also known as Cyber liability insurance protects organizations from cyber attacks or online theft.
So, guys buying an insurance policy is always a wise option but one must thoroughly research the companies that come under the above-mentioned insurance types before purchasing an insurance policy to choose the most suitable policy for them.