There are many different specialty insurance products on the market geared towards protecting your property and your interests. These all fall under the umbrella of personal insurance that specifically addresses all types of issues and covers any incident that could make life financially burdensome. To help you out, here is a summary of each of these specific types of personal insurance:

Types of Personal Insurance

Homeowners Insurance

Home insurance provides coverage for damage done to a home due to a disaster and the destruction of furniture and personal assets. It covers the exterior, interior, and lot. It also provides compensation to anyone who sustains an injury in the insured’s home or on their property.

  • Homeowners’ insurance policies have liability limits, which means there is a limit to the compensation provided in the event of a claim. This limit will stipulate the amount toward repairing structural damage, a place to stay while this is happening, replacing destroyed personal items, and settling personal injury claims. Of course, the insured will still have to pay some out-of-pocket costs in the deductible form.
  • Usually, an “act of God,” such as a flood or an earthquake, is not covered by a standard homeowner’s policy. That said, if the insured lives in an area prone to such events, such as Louisiana or California, respectively, state laws will stipulate adequate coverage.

Auto Insurance

Auto insurance protects the insured against financial loss should he or she get into an accident. Depending on this coverage’s extent, the insurance company’s contract states that the insured will pay premiums in exchange for financial coverage should an accident occur. Most policies are for six months to one year.

Basic auto insurance covers medical, liability, and property damage. That said, there six differing types of coverage. Some of these are required by the laws of each state to register a vehicle. They are as follows:

  • Collision insurance pays for the insured’s vehicle damage after colliding with another car or object. It also covers pothole damage.
  • Liability insurance, which is usually required, covers damage done to other vehicles or objects, such as telephone poles, fences, and mailboxes, by the insured’s car.
  • Bodily injury liability insurance covers any physical damage sustained by the insured’s vehicle if they are at fault. Again, this is requisite.
  • Personal injury protection insurance pays for such medical treatment and lost wages due to an accident regardless of fault.
  • Uninsured or underinsured motorist coverage compensates the insured for the lack of coverage carried by another driver at fault in an accident. It also covers pedestrian victims and injuries due to a hit-and-run.
  • Comprehensive auto insurance covers both theft and destruction caused outside of a collision, such as any damage caused by keying, falling objects, animals, or inclement weather.

Health Insurance

Health insurance is a contract between the insured and the insurer that pays specified sums towards medical, surgical, and dental expenses in exchange for premiums.

  • It can either be used to pay health providers directly or can be used to reimburse the insured for the cost of treating an injury or illness.
  • Health insurance policies premiums are due annually or monthly.
  • Many times, health insurance provides a benefit of employment. The policy is a contract between the insurer, the insured, and their employer. The latter two split the costs of premiums.
  • Health insurers can deny coverage for treatment received without a pre-authorization. They may not cover brand name prescriptions if there are generic equivalents.
  • Health insurers may also require co-pays from those insured or request that they meet deductibles before coverage kicks in.

Health care plans are complicated because there are many specific rules regarding co-pays, deductibles, and physician networks.

  • A managed care plan states that the insured must receive care from individual providers to receive maximum coverage. If the insured seeks an out-of-network provider, the insurer can pay a minimal amount or deny the claim outright.
  • Some managed plans ask the insured to choose a primary care doctor to oversee all of the insured’s treatment. The preferred physician provides referrals for specializations outside of their expertise.

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Disability Insurance

Disability insurance compensates workers that have become ill or injured and rendered unable to perform their job duties. This compensation protects the insured’s and their family’s economic well-being until he or she can again hold a job. The policy may offer short-term disability benefits, sick leave wages, and, many times, long-term disability benefits.

  • Short-term benefits cover a period of three to six months when the insured may not be able to work, such as recovery from a stroke, a heart attack, or major surgery. Long-term benefits provide a portion of the insured’s salary if they cannot work for longer than six months.
  • Each disability insurer will have different criteria to meet as far as what constitutes a disability. If benefits are allowed, a specific period in which the insured has been disabled must have already passed before they can collect—the elimination period.
  • Disability policy premiums differ depending on the lengths of the benefit and elimination periods and the insurer’s particular scope of what they consider to be disabled. The insured must also decide if they want a policy that kicks in when one can no longer work within their occupation or when they can no longer work at all.

Types of Disability Insurance

  • Individual Disability Insurance
  • Long Term Disability Insurance
  • Short Term Disability Insurance
  • Group Disability Insurance
  • Supplemental Disability Insurance
  • Total and Permanent Disability Insurance

Long-Term Care Insurance

Long-term care insurance goes beyond typical health insurance to pay the costs of care beyond a predetermined end. Meaning that the insured is either living in a convalescent home, an assisted living facility, or requires live-in or visiting caregivers to help perform necessary daily living activities or supervise a disabling condition.

  • Long-term care is costly, and private coverage is usually much more flexible than public assistance programs like Medicare and Medicaid. As such, many healthy, middle-aged individuals opt for coverage early because it will be much more affordable at such a time in their lives. That said, they will also pay the premiums over a more extended period.
  • Most long-term care policies will only cover a specific dollar amount for each home care visit or every day in a nursing home or hospice. The insured needs to weigh their options carefully.

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Life Insurance

In exchange for premiums, a life insurance policy pays a benefit to a chosen beneficiary upon the insured’s death; This can take the place of the insured’s income so their family will remain provided. The policy may also pay for the insured’s funeral and their final expenses.

  • The insured chooses a beneficiary, usually a spouse, child, sibling, or parent, that will receive a cash benefit once he or she passes. Usually, the insured will choose a service that will accommodate the intended beneficiaries and cover their respective future needs. As such, they may receive a lump sum or an annuity. Sometimes it is even included as part of a trust.
  • Premiums paid by the insured are determined by their health, age, gender, medical history, life expectancy, occupation, and propensity for dangerous hobbies. Life insurance is a binding contract; all inquiries must be answered honestly to render the contract legal. Of course, premiums are higher on those policies ensuring lives that are most at risk. Premiums are higher on policies that pay out a higher benefit, as well.

Types of Life Insurance Life Insurance Policies

  • Universal Life Insurance
  • Term Life Insurance
  • Permanent Life Insurance
  • Whole Life Insurance
  • Million Dollar Policy Insurance
  • Funeral & Burial Insurance

In conclusion, personal insurance covers all aspects of your life and property. Ask your agent what policies are most important for you and your family so you can protect your financial future.