There are many types of insurance, but some common types are described here.
§ Health insurance: Helps you pay for doctor fees and sometimes prescription
drugs. Once you buy health insurance coverage, you and your health insurer
each agree to pay a part of your medical expenses — usually a certain dollar
amount or percentage of the expenses.
§ Life insurance: Pays a beneficiary you select a set amount of money if or when
you die. The money from your life insurance policy can help your family pay
bills and cover living expenses. There are different types of life insurance.
One is term life insurance, which pays a benefit only if the insured person dies
during the term of the policy (usually from one to 30 years). Another is whole
life insurance, which pays a benefit whenever the insured person dies.
§ Disability insurance: Protects individuals and their families from financial
hardship when illness or injury prevents them from earning a living. Many
employers offer some form of disability coverage to employees, or you can
buy an individual disability insurance policy
§ Auto insurance: Protects you from paying the full cost for vehicle repairs and
medical expenses due to a collision. In most states, the law requires you to have
auto insurance when operating a motor vehicle.
§ Homeowner’s or renter’s insurance: Covers your home and the personal
belongings inside in the event of loss or theft; helps pay for repairs and
replacement. If you have a mortgage on your property, most lenders require
you to have homeowner’s insurance. If you’re renting, the landlord might require
you to have renter’s insurance.
§ Umbrella Policy : This policy adds an extra layer of protection for you and your assets when you need coverage that goes above and beyond your homeowners or auto insurance. Let’s say you end up at fault for a multiple-vehicle accident (that’s no fun). Your medical bills and property damages could quickly add up to more than your auto insurance will even cover. And if you’re sued for the difference, your savings, your home and even your future wages could be on the chopping block.
§ Long Term Care Insurance : Covers a ton of services like nursing home care and in-home help with basic personal tasks (bathing, grooming and eating). Usually, long-term care means those who have a chronic illness or disability need ongoing help. If it sounds expensive, that’s because it is. And long-term care costs aren’t usually covered by Medicare either.