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Insurance
Accidents will happen…
…which is why the concept of ‘insurance’ was developed.
Insurance enables and individual to be compensated for any loss or misfortune that may happen.
There are literally thousands of different insurance policies available, and they can be used to protect you and your belongings from everyday risks such as fire, theft, and accidental damage.
The following list covers the main types of insurance available, and gives a brief description of how each one works:
Life Insurance – pays out, either to a person of your choice or to cover an outstanding mortgage, in the event of your death.
Accident, sickness, and unemployment Insurance – pays out a regular amount of money if you are unable to work, either because of ill health or redundancy.
Home buildings Insurance – will cover the cost of repairing or rebuilding your home if it is damaged due to unforeseen circumstances.
Home contents Insurance – will cover the cost of replacing your possessions which have been lost or damaged due to unforeseen circumstances.
Medical Insurance – will cover the costs of having private medical treatment should you need it.
Critical Illness Insurance – will pay out a specified amount of money if you are diagnosed with having a life threatening illness, such as cancer or heart attack.
Motor Insurance – pays out if you injure someone, or damage someone else’s property while driving your car. This is compulsory for vehicles using public roads.
Holiday Insurance – pays out if you have to cancel your holiday, or if you loose your possessions, become ill, injure somebody, or damage someone else’s possessions while on holiday.
Pet Insurance – pays out in the event of your pet becoming sick and requiring treatment from a vet.
There are, of course, many other types of insurance policy available, and each one will have its own rules.
The conditions under which an insurance policy will pay out are listed in the ‘terms and conditions’ of the policy. These terms and conditions should be provided whenever you apply for an insurance policy.
It is very important that you read the terms and conditions to any policy before you take the insurance out, as there may be situations that the policy will not cover.
Why do we need insurance?
The law requires you to have motor insurance if you own or use a motor vehicle on the public roads. Mortgage companies will also insist you have buildings insurance, and sometimes Life insurance, if you borrow money from them.
It is also a legal requirement for an employer to have insurance to cover their employees against accident while they are at work. Other than these few cases, it is not normally compulsory to have insurance.
People also prefer to insure any expensive, or sentimental items that they have. This may be because they will not be able to afford a replacement if anything was to happen to it, or because the item is totally irreplaceable. In these circumstances, it all boils down to personal choice.
How does it work?
An insurance policy is an agreement between you and an insurer. Under the terms of the contract, you promise to pay money in the form of a regular premium, and, in return, the insurer will promise to pay out a specific sum of money in the form of compensation for the person insured, or the damage, loss, or theft of the item.
How do you get insured?
There are hundreds of companies that will offer some form of insurance policy or another, all of which are very keen to sell you their policy. When getting insurance, it is always advisable to shop around. This way you can compare several different policies, and opt for the one that best suits your needs.
The first thing to do is to get a few quotes. A quote will tell you what the cost of the insurance would be, before you take out the policy. Prices can vary from one insurer to another, so find out which one is best for you.
After you have decided, you will then have to make the agreement with the insurer. This will normally involve signing a written contract. Once the contract has been signed and returned to the insurer, the insurance will be in place.
All you have to do now is make sure that your premiums are always paid on time. That is all there is to it.
For more information and activities on insurance please visit www.doughuk.com
Disclaimer, Target Audience, Jurisdiction Last updated & checked: 30/03/2006