Insurance policies in US, people buy insurance to protect themselves from losing money. you have to understand that if you buy insurance you are going to pay premium, the premium most of the time are been being paid every month.
At the same time promise to be careful will be made for the insurer to be careful. a duty of care will be taken in case if any misfortune comes to the ,person that is insured. Checkout life insurance review in USA
And if eventually the bad thing happens to the insurer the company is going to pay the money back.
But it depends on the the measure of the time in which the insurance take place. it gets to a time when the company will no longer make the payment back to the person, and it comes the person involve is not careful.
it is a contract represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
The company pools clients’ risks to make payments more affordable for the insured
How insurance policy works in US
Insurance works by pooling together the resources of a large number of people who have similar risks to make sure that the few people who experience loss are protected.
When take out an insurance policy and pay an insurance premium, you are putting a little of your own money into that pool.
If your property is accidentally lost, stolen, damaged or destroyed, and you have a general insurance policy that covers the property for those risks,
You can make a claim and draw on that pool of money to help pay for repairs or replacements costs.
This may allow you to avoid paying the full cost of replacing, repairing, rebuilding or restoring valuable things if they are lost, stolen, damaged or destroyed. It also means you could avoid ending up with a large debt or liability.
When you pay an insurance premium, you will have access to the pool of money only if you claim a loss that is covered by your insurance policy.
It is possible that a person who has paid an insurance premium for many years might never make a claim.
When you buy an insurance policy, your insurer promises it will pay you for the type of loss stipulated in
the policy such as an accident, theft, loss or catastrophe by funding repairs or replacement of items, up to the limit of your policy, or sometimes by providing a cash settlement.
Each insurer’s policies have different rules about what the policy will cover. checkout some of the insurance companies in US Exclusions may apply, so you should read your policy carefully and seek advice if you’re not sure what your policy will cover.
Underwriting is the way an insurer works out how much to charge for each risk they cover for each person who buys an insurance policy and under what terms.
When preparing a policy, insurance underwriters will calculate:
- How much they will agree to pay for a loss
- Under what circumstances they will make a payment
- How much the premium will be
Underwriters think about a number of different things when working out the price of a particular risk for insurance.
For example, car insurance premiums may vary depending on the age, sex and driving record of the main drivers, as well as the location, type and age of the car.
Each insurer has its own set of underwriting guidelines to help determine whether or not they should accept the risk of a particular situation.
In some cases, an insurer may decide it won’t cover a particular risk while other insurers may do so.
Underwriting involves working out a premium that is low enough to attract a good number of buyers,
And high enough so that there will be enough money in the pooled funds to pay all the claims that might be made, plus make a profit for the insurer’s shareholders.
The importance of insurance
Here are the list of things you should note:
1. Protection for you and your family
Your family depend on your financial support to enjoy a decent standard of living, which is why insurance is especially important once you start a family. It means the people who matter most in your life may be protected from financial hardship if the unexpected happens.
2. Reduce stress during difficult times
None of us know what lies around the corner. Unforeseen tragedies such as illness, injury or permanent disability, even death – can leave you and your family facing tremendous emotional stress, and even grief. With insurance in place, you or your family’s financial stress will be reduced, and you can focus on recovery and rebuilding your lives.
3. To enjoy financial security
No matter what your financial position is today, an unexpected event can see it all unravel very quickly. Insurance offers a payout so that if there is an unforeseen event you and your family can hopefully continue to move forward.
4. Peace of mind
No amount of money can replace your health and wellbeing – or the role you play in your family. But you can at least have peace of mind knowing that if anything happened to you, your family’s financial security is assisted by insurance.
5. A legacy to leave behind
A lump sum death benefit can secure the financial future for your children and protect their standard of living.
Some of the insurance policies in US
They are the following:
Life Insurance is different from other insurance in the sense that, here, the subject matter of insurance is the life of a human being.
The insurer will pay the fixed amount of insurance at the time of death or at the expiry of a certain period.
General insurance includes Property Insurance, Liability Insurance, and Other Forms of Insurance.
Fire and Marine Insurances are strictly called Property Insurance. Motor, Theft, Fidelity and Machine Insurances include the extent of liability insurance to a certain extent.
Under the property insurance property of person/persons are insured against a certain specified risk.
The risk may be fire or marine perils, theft of property or goods damage to property at the accident.
Marine insurance provides protection against the loss of marine perils. you may also like to know about disability insurance in US
The marine perils are; collision with a rock or ship, attacks by enemies, fire, and captured by pirates, etc.
these perils cause damage, destruction or disappearance of the ship and cargo and non-payment of freight.
Fire Insurance covers the risk of fire.
In the absence of fire insurance, the fire waste will increase not only to the individual but to the society as well.
With the help of fire insurance, the losses arising due to fire are compensated and the society is not losing much.
The general Insurance also includes liability insurance whereby the insured is liable to pay the damage of property or to compensate for the loss of persona; injury or death.
The social insurance is to provide protection to the weaker sections of the society who are unable to pay the premium for adequate insurance.
Health insurance in the United States
- Federal Employees Health Benefits Program (FEHBP)
- Indian Health Service (IHS)
- Medicaid / State Health Insurance Assistance Program (SHIP)
- Prescription Assistance (SPAP)
- Military Health System (MHS) / Tricare.
- Children’s Health Insurance Program (CHIP)
The personal insurance includes insurance of human life which may suffer a loss due to death, accident, and disease.
Therefore, personal insurance is further sub-classified into life insurance, personal accident insurance, and health insurance. And may more.