Insurance Overview: Types and Coverage

Insurance Overview

• A contract between the insurer and the insured, where the insurer provides financial protection against specified losses or risks
• Premiums are paid by the insured to maintain coverage

Life Insurance

• Provides a death benefit to the beneficiary in the event of the insured's death
• Types:
  • Term life insurance: coverage for a specified period (e.g., 10, 20, or 30 years)
  • Permanent life insurance: lifetime coverage with a cash value component
  • Whole life insurance: permanent coverage with a fixed premium
  • Universal life insurance: flexible premium and adjustable coverage

Auto Insurance

• Covers damages or losses to the insured's vehicle and/or injuries to others
• Mandatory in most states, with minimum coverage requirements
• Types:
  • Liability coverage: pays for damages or injuries to others
  • Collision coverage: pays for damages to the insured's vehicle
  • Comprehensive coverage: pays for non-collision damages (e.g., theft, vandalism)
  • Personal injury protection (PIP) coverage: pays for medical expenses and lost wages

Homeowners Insurance

• Covers damages or losses to the insured's home and/or personal property
• Typically includes liability coverage for accidents on the property
• Types:
  • Dwelling coverage: pays for damages to the home's structure
  • Personal property coverage: pays for damages to or loss of personal belongings
  • Liability coverage: pays for damages or injuries to others

Health Insurance

• Covers medical expenses and/or provides access to healthcare services
• Types:
  • Individual health insurance: coverage for individuals or families
  • Group health insurance: coverage through an employer or organization
  • Government-sponsored health insurance: programs like Medicare, Medicaid, and the Affordable Care Act (ACA)

Umbrella Insurance

• Provides additional liability coverage beyond the limits of other insurance policies (e.g., auto, homeowners)
• Protects against catastrophic losses or lawsuits
• Typically sold in increments of $1 million

Long-Term Care Insurance

• Covers the cost of long-term care services, such as nursing home care, assisted living, or home care
• Designed to help individuals with chronic illnesses or disabilities
• Can be expensive, with premiums increasing with age

Renters Insurance

• Covers damages or losses to the insured's personal property while renting a home or apartment
• Typically includes liability coverage for accidents on the rental property
• May also provide additional living expenses if the rental property becomes uninhabitable