LeoGlossary: Insurance
Insuranceis a contract between an individual or business (the policyholder) and an insurance company (the insurer). In exchange for a fee (premium), the insurer agrees to pay the policyholder or a beneficiary a certain amount of money if a specific event occurs (the covered loss).
People buy insurance for a variety of reasons, including:
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To protect their financial assets. Insurance can help people to recover financially from unexpected events, such as car accidents, home fires, and medical emergencies. Without insurance, people could be forced to pay for these losses out of pocket, which could be financially devastating.
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To protect their loved ones. Insurance can provide financial support for loved ones in the event of a death or disability. For example, life Insurance can provide a death benefit to the policyholder's beneficiaries, which can be used to pay for funeral expenses, outstanding debts, and other financial obligations.
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To comply with legal requirements. In some cases, people are legally required to purchase insurance. For example, most states require drivers to have auto insurance.
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To give themselves peace of mind. Knowing that you are financially protected in the event of a loss can provide peace of mind and reduce stress.
Types of Insurance
There are many different types of insurance, each designed to protect against a different type of loss. Here are some of the most common types of insurance and what they cover:
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Health insurance: Pays for medical expenses, such as doctor's visits, hospital stays, and prescription drugs.
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Life insurance: Pays a death benefit to the policyholder's beneficiaries upon their death.
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Homeowners insurance: Pays for damage to your home and belongings caused by fire, theft, storms, and other covered perils.
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Auto insurance: Pays for damage to your car and the other car involved in an accident, as well as medical expenses for injured parties.
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Business insurance: Protects businesses from financial losses due to lawsuits, property damage, and other unforeseen events.
Other types of insurance include:
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Rental insurance: Protects renters from financial losses due to damage to their rental property or to their belongings.
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Umbrella insurance: Provides additional liability coverage) beyond the limits of other types of insurance, such as homeowners insurance and auto insurance.
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Pet insurance: Helps to pay for veterinary expenses for your pet.
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Travel insurance: Protects travelers from financial losses due to unexpected events, such as flight cancellations, lost luggage, and medical emergencies.
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Long-term care insurance: Helps to pay for the cost of long-term care, such as a nursing home or assisted living facility.
When choosing insurance, it is important to consider your individual needs and budget. You should also compare different policies from different insurance companies to find the best coverage and price.
How To Buy
There are a few different ways that people can go about buying insurance. The most common ways are:
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Through an insurance agent. An insurance agent is a professional who can help you to compare different policies from different insurance companies and find the best coverage for your needs. Insurance agents can also help you to understand the different types of insurance and to file claims if you need to.
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Directly from an insurance company. Many insurance companies allow you to purchase policies directly from their website or over the phone. This can be a convenient option, but it is important to do your research and compare different policies before you purchase one.
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Through the Health Insurance Marketplace. The Health Insurance Marketplace is a government-run website where people can shop for and enroll in health insurance plans. The Marketplace is a good option for people who are self-employed or who do not have health insurance through their employer.
To buy insurance, you will typically need to provide the following information:
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Your personal information, such as your name, address, and date of birth
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Information about your assets, such as your home, car, and business
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Information about your health, such as any medical conditions you have and any medications you are taking
Once you have provided this information, the insurance company will be able to give you a quote. The quote will tell you how much the policy will cost and what coverage it will provide.
General:
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