Commonly known as a policy, insurance is a contractual agreement of protection against unexpected covered loss. Simpler, an insurance policy holder (the insured) pays a fee (premium) to an insurance company (the insurer) for guaranteed financial compensation (reimbursement) for specified loss.
Although the risk of loss or damage seems remote, and the idea of defending against hypothetical misfortunes sounds misguided, it’s imperative to protect yourself financially against potentially ruinous eventualities.
It is equally important to understand and evaluate the type, capacity and provisions of your insurance policies, as well as their appropriateness in regards to your current and future needs.
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4 Core Insurance Categories
Insurance coverage that pays for medical and surgical expenses. The insurance company reimburses the policy holder directly or more commonly pays the healthcare provider.
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A legal contract between an insurer and policy holder, maintained through payment of a premium, where the insurance company agrees to pay a designated beneficiary upon the death of the insured person. Essentially, life insurance is a form of protection against loss of income if the insured dies.
Insurance that provides the beneficiary (worker) with earned income in the event a disability prevents the performance of central duties.
- Social Security Disability Insurance (SSDI)
“. . . pays benefits to you and certain members of your family if you are ‘insured,’ meaning that you worked long enough hand paid Social Security taxes.”
- Supplemental Security Insurance (SSI)
“. . . pays benefits based on financial need.”
- Long -Term Care Insurance
Insurance policies covering damage to or loss of a policy holder’s property. Also referred to as casualty insurance, whereby providing liability coverage of an individual or organization for negligent acts or omissions.
- Vehicle Insurance
Vehicle insurance coverage that mitigates costs associated with automobile accidents and other associated damage and loss. There are several different types of automobile insurance.
- Homeowners Insurance
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- Renters Insurance
Insurance 101 – Renters Insurance
- Umbrella Insurance
“An umbrella insurance policy is extra liability insurance coverage that goes beyond the limits of the insured’s homeowners, auto or watercraft insurance. It provides an additional layer of security to those who are at risk of being sued for damages to other people’s property or injuries caused to others in an accident.”
- Flood Insurance