Insurance coverage Tips

Insurance definition

What is Insurance? Insurance is simply the transfer of one's risks to an Insurance company at a fee. Calamities or misfortune can strike a person anytime. When it does, the effect is usually unbearable. Under normal circumstances, Insurance works under the notion that calamities can occur anytime in our day-to-day lives. Since these calamities are unexpected and may occur anytime, it is usually best to be prepared in view of any unexpected financial losses that may accompany life’s calamities. On a rainy day, an umbrella goes a long way to assuage unexpected negative effects by bringing comforting shelter.

We ultimately need insurance cover

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Why do we need Insurance?

Life is full of unexpected incidents. Some of these occurrences are personal, within the family or induced externally. For instance, none of us knows when, whether it will rain and how much rain will come pouring from the heavens. Nevertheless, it is imperative that we carry an umbrella to help keep us dry during the downpour. Similarly, we never know when we might have a fire, an accident, or fall sick and are hospitalized or fail to meet our financial obligations. People have traditionally pooled resources to cushion themselves against unexpected incidents in the life and even death in the family. Money becomes scarce when we need it most.

Insurance coverage comes in handy to address unprecedented occurrences in life. Losses creep in when we least expect them. The same applies to misfortunes. We need some kind of mitigation to cushion us against financial losses. We need a backup plan to lessen the severity or intensity of misfortunes.

When the unexpected meets the unprepared

There are many incidents in life that catch us unprepared. Although we cannot prepare enough for life’s expectations, the earlier we prepare for the unexpected, the better our quality of life will be after experiencing the unexpected.

Insurance actually acts in such a way as to cause an offending situation to seem less serious than it actually is.

Insurance does not stop calamities from happening. Insurance simply mitigates. It is like a palliation, an extenuation or exculpation. It is an attempt to represent an offense as less serious than it appears by providing financial mitigation when it is most opportune. Fires break out accidentally. The fact that we are okay today does not mean we won’t fall sick tonight or tomorrow. The frequency with which we use cars or automobiles exposes us to freak motor accidents with each daily ride as we cruise on our highways. Death is a portion of life that occurs unexpectedly. When all these happen, we find ourselves totally unprepared for the inevitable financial consequences.

Benefits of Insurance

Investment security:

An Insurance policy may be used as security or collateral for the repayment of a loan where an investor borrows funds for business or financial development projects. This depends on preferred policy.

Tax relief:

Insurance policies may provide a sound reason for tax authorities to reduce or lower the taxable bracket of your income, depending on preferred cover. The presence of a policy qualifies one to get a tax relief thereby avoiding the payment of tax on every coin earned.

Family protection:

Our family members can fall sick, be hospitalized and incur bills that we are not able to settle using available incomes or resources. Sometimes the death of a breadwinner occurs in the family calling for death benefits to dependents from the insurer. Each member of the family needs an education that we can ill afford. Insurance provides for such cover.

Protection of assets:

A working person acquires valuable assets that are prone to theft, destruction or damage. Insurance covers such losses adequately.

Cash value benefits:

Some policies provide a means of earning from the cover which may be pegged to high yielding investments like stock markets, thereby making the policy lucrative to clients.

Peace of mind:

Insurance cover removes anxiety from clients due to the security it provides in case of any unforeseen eventuality. Peace of mind leads to a sense of well-being and mental relaxation.

Tips for buying insurance coverage

The role of the insurance company is to avail money on behalf of insured individuals for repair of damages caused on the roads, at work or even at home, the replacement of destroyed property, remittance of money to replace stolen property, extend financial benefits to families to replace lost income due to the demise or disability of an insured policyholder.

- Before buying insurance cover, ensure to get your key priorities right by compiling a list of all valuable items that can be insured.

- Do not buy insurance cover that your employer has taken care of, group life cover has cushioned or if you have adequate health cover.

- Ensure to compare insurance products offered by various companies to ensure you only go for the very best and profitable products.

- Only go for advice from licensed agents, brokers and medical care providers.

- It is important to completely fill policy forms personally by providing factual information about yourself.

- Do not let an insurance agent or insurance broker fill the policy documents on your behalf. A number of agents usually set their minds upon the highest commission pegged on the sale of the most expensive product.

- Take time to read through the policy document and understand its contents prior to signing the document. Never sign in a hurry, under compulsion, under duress or uncomfortable circumstances. Remember that canceling a policy also results in losses of all accumulated premiums. You will be lucky to get a reasonable refund.

- Remember to keep records of policy documents and receipts as evidence of payments made for reference in future.

Insurance coverage types

Many people are often faced with indecision on the kind of insurance policy to buy. There are many kinds of insurance covers depending on one’s need. A few of the popular ones include the following:

Insurance coverage

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General insurance

General insurance compensates for lost or destroyed possessions due to misfortunes like accidental fires, unexpected pests, droughts, impromptu strikes, unexpected storms, flash floods, theft of one's possessions and many other issues. Athletes and show business people have been known to insure body parts they use to generate their incomes. For instance, a famous musician or actor may buy insurance cover for their voice, while a soccer player may insure their legs to secure key sources of their finances.

Life insurance

We love long life and we even dream about living forever. This is evidenced by the glut of healthy foods, age-reversal drugs, and body-beauty care products in the market today. Good health care has greatly improved life expectancy to a level where many people live very long after retirement from an active working life.

Having spent all our energy and productivity at work during our younger stages of life, we usually do not have strength to work due to old age but still need to meet our daily needs. Life insurance compensates a policyholder at the end of the period covered by the policy or the insurance contract. The insurance company may mitigate for dependents’ loss of a breadwinner in the event of his or her untimely demise or disability arising in the course of duty.

It is, therefore necessary to buy a life insurance policy, organize a good investment plan, arrange for a pension plan, arrange for annuities, and organize for deposit administration schemes to cover for our needs during old age instead of relying on alms or help from our dependents.

Insurance companies provide Insurance cover for many aspects of life, some of which are listed below. The most preferred being Life Insurance cover which is categorized as Permanent Life (Life Long) and Term Life (Short Term) Insurance cover.

The Lifelong cover lasts throughout one’s lifetime but the Term Life cover lasts up to a specified time limit agreed upon by both parties and expires when the policy lapses. The packages are listed below:

Life Insurance cover

- Term life – Pure Life Insurance coverage, one to 30 years, death benefits for dependents. Cheaper.

- Whole life – Permanent Lifelong Insurance cover (Ordinary) with investment cash value hence expensive

- Universal life – Less expensive cover that is pegged to strict remittance of premiums

- Indexed universal life – A flexible cover that offers stocks-linked cash value

- Variable universal life - A flexible cover that offers high market-linked cash value

Etc.

Key differences between Life Assurance and General Insurance

Life assurance
General insurance
Has long surrender value
No surrender value
Long term contract/not renewable
Short term contract/annual contract/ renewable yearly
Can be assigned to beneficiaries
Cannot be assigned to beneficiaries/third party
Deals with life
Deals with property
Risks is certain
Risk may or may not apply
Principle of indemnity will not apply
Principle of indemnity applies
Principle of subrogation will not apply
Principle of subrogation applies
Assured benefits from double insurance
Insured losses on out on double insurance
No need of proof of insurable interest at the time of claim
Need of proof of insurable interest at the time of claim
Sum assured appreciates
Sum insured remains the same
Policy can be used as security for a loan
Policy cannot be used as security for a loan
Life assurance as maturity date
Has no maturity date
Sum assured depends on ability to pay premiums
Sum assured depends on the market value of the property
Can be a saving plan
Cannot be a saving plan
Premiums are paid regularly
Premiums are paid at once

Insurance coverage

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Health insurance

No single person can claim to be totally free from sickness or illness from the time they are born until death. It is, therefore, necessary to carefully plan the unexpected sickness that might even land you in a hospital bed. Research reveals that strokes and heart attacks have become commonplace due to changes in lifestyles. Health or Medical insurance cover takes care of hospital expenses pegged to sickness or illness of an insured worker. Every worker is exposed to unexpected accidental incidents in their working life. One may slip and fall, you may be walking home and get mugged by criminals or you may be knocked down by a car and get injured. (See the article on “Health Insurance Tips”)

Auto or Car insurance

Owners of motor vehicles should always ensure to purchase compulsory motor vehicle insurance. Employers who have many workers should consider buying injury benefit insurance to cushion these workers against loss. (See the article on “Car Insurance Tips”)

Property cover

Insurance cover should be purchased for one’s valuable possessions such as your business, your nice house, your agricultural or cash crops, your livestock. This is because life is totally unpredictable and visits upon us equally unexpected financial losses that can quickly render a wealthy person poor, with disastrous consequences such as negative and unhealthy changes in one’s lifestyles.

Education policy

Education is mandatory for anybody with children who need a lifetime of education. But, despite being necessary to life, education has become expensive and may even be beyond the reach of many families. Money is never always available when we need to go to school and at the same time fulfill life’s obligations. A good education policy provides mitigation whereby an insured individual pays small amounts of money to an insurance company from the time a child is born up to the time when they need to go to school.

Precautions when buying insurance cover

Insurance cover should only be purchased from insurance companies that have been licensed by the government. Also, the client should ensure insurance agents they deal are genuine and also with work for licensed companies. This checks fraud in the insurance industry while protecting the client considering the fact that insurance cover involves a large amount of money that has accumulated over a long period of time. This also ensures the client gets real value for money spent on a valid policy.

It is usually advisable to deal with an accessible insurance branch within your local vicinity where you can have your problems addressed promptly and efficiently. The proximity of an office secures customer trust in the company in case of problems while saving time during insurance claims or purchase/renewal of insurance cover.

The importance of insurance

Top Insurance companies in U.S.A

There are numerous insurance companies in the USA. Some of the top performers in the life insurance industry are listed below. Free insurance quotes may be sought by picking any name below and accessing each company’s website using your preferred search engine;

AIG Life Insurance

Allstate Insurance

Axa Equitable Life Insurance

Genworth Financial

Greatwest Life Assurance Company

Guardian Life Insurance

John Hancock Life Insurance

Lincoln Financial Life Insurance

MassMutual Life Insurance

Metlife Life Insurance

Midland National Life Insurance

Mutual of Omaha Life Insurance

Nationwide Life Insurance

New York Life Insurance

North Western Mutual Life Insurance

Pacific Life Insurance

Primerica Life Insurance

Principal Financial Life Insurance

Protective Life Insurance

Prudential Life Insurance

State Farm Life Insurance

Transamerica Life Insurance

Voya Life Insurance

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List of Insurance companies in the USA

AARP

21st Century Insurance

ACE Limited

Acuity

Aetna

Affirmative Insurance

Aflac

Alleghany Corporation

Allied Insurance

Allstate

American Automobile Association

American Family Insurance

American Income Life Insurance Company

American International Group (AIG)

American National Insurance Company

American Strategic Insurance (ASI)

Ameritas Life Insurance Company

Amica Mutual Insurance

Applied Underwriters

Arbella Insurance Group

Assurant

Assurity Life Insurance Company

Auto-Owners Insurance

AXA Equitable Life Insurance Company

Bankers Life and Casualty Company

Berkshire Hathaway

Chubb Corp.

Cincinnati Insurance Company

CNA Financial

CNO Financial Group

Colonial Life & Accident Insurance Company

Combined Insurance

Commerce Insurance Group

Country Financial

Elephant.com

Encompass Insurance Company

Erie Insurance Group

Esurance

Evergreen USA RRG

Farmers Insurance Group

Federated Mutual Insurance Company

First Insurance Company of Hawaii

FM Global

GAINSCO

GEICO

General Re

Genworth Financial

Gerber Life Insurance Company

GMAC Insurance

Gracy Title Company

Grange Mutual Casualty Company

Guardian Life Insurance Company of America

GuideOne Mutual Insurance

Hanover Insurance

The Hartford

HCC Insurance Holdings

Healthy Paws Pet Insurance & Foundation

Hiscox Small Business Insurance

Horace Mann

Infinity Property & Casualty Corporation

Insurance Panda

IntelliQuote Insurance Services

Ironshore

Jackson National Life

John Hancock Insurance

K&K Insurance

Kansas City Life Insurance Company

Kentucky Farm Bureau

Knights of Columbus

Liberty Mutual

Lincoln National Corporation

Manhattan Life Insurance Company

Markel Corporation

MassMutual

Merchants Insurance Group

Mercury Insurance Group

MetLife

Modern Woodmen of America

Mutual of Omaha

National Life

Nationwide Mutual Insurance Company

New Jersey Manufacturers Insurance Company

New York Life Insurance Company

The Norfolk & Dedham Group

Northwestern Mutual

Ohio National Financial Services

Omega

OneBeacon

Oxford Health Plans

Pacific Life

Pacificare

PEMCO

Penn Mutual

Philadelphia Contributionship for the Insurance of Houses from Loss by Fire

Philadelphia Insurance Companies

Physicians Mutual

Primerica

Principal Financial Group

Progressive

Protective Life

Prudential Financial

QBE

The Regence Group

Reliance Insurance Company

RLI Corp.

Safe Auto Insurance Company

Safeco

Safeway Insurance Group

Securian Financial Group

Selective Insurance

Sentry Insurance

Shelter Insurance

Southern Aid and Insurance Company

Standard Insurance Company

State Farm Insurance

Sun Life Financial

Symetra

TIAA-CREF

Transamerica Corporation

The Travelers Companies

Trupanion

Unum

USAA

West Bend Mutual Insurance

West Coast Life

Western & Southern Financial Group

Western Mutual Insurance Group

Westfield Insurance

Westminster American Insurance Company

White Mountains Insurance Group

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