Online Class: Understanding Insurance Types

In this day and age, it is more important than ever for both individuals and businesses to be covered for the unexpected.  Do you know what types of coverage you should have?  There are many types to choose from the most popular to the most bizarre.

This course reviews what the most common and important types of insurance are available to you, as well as how insurance works.  You will learn about the different types of insurance and the many benefits it can have to your financial health.

Here are just a few topics that are covered in this thorough course:  1) life insurance, 2) health insurance, 3) auto insurance, and much more.  You will learn about important topics such as who is covered and how insurance coverage works from beginning to payout.

With the at times shaky financial state of the world, it is more important than ever to protect yourself, your family, and even your business from the unknown.  This course will teach you about different types of insurance coverage in great detail.

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Course Motivation

When the unexpected happens, do you have a plan for how you would handle the situation? Unfortunately, many people do not have any idea what they would do should a disaster strike, and this can be financially devastating. Accidents can, and will, happen; no one is safe from them. One of the most important financial decisions one can make for their family is to purchase insurance coverage; however, there are various types of insurance to choose from. So, people need to look at their individual circumstances to decide which insurance is needed, and why. People work hard to keep food on the table and a roof over their heads, so it makes sense to insure some of the most important things in life. 

The bottom line is that insurance exists to protect people from risks. No matter one's income level, or where they live, no one is immune from risk. At any time, people all over the world are victims of fires, theft, illness, accidents, severe weather, and much more. These things can happen anytime, anywhere. The idea of insurance goes back hundreds of years and is something that has been used, one way or another, since the beginning of time. 

Several types of insurance to choose from

Many people are still unaware of how many different types of insurance coverage are available to consumers. Below are some types of insurance that will be covered in this course.

• Health insurance

• Auto insurance

• Life insurance

• Gap insurance

• Accident or sickness insurance

• Property insurance

• Liability insurance

Pros and cons of purchasing insurance

When it comes to purchasing insurance, there are pros and cons; however, do keep in mind that the pros greatly outweigh the cons. It is important to purchase insurance that will protect you, your family members, and/or possessions, because there are some types of insurance that will unnecessarily drain your savings. Insurance is one of the most important things you can invest in, because it will protect you from risk, and everyone is prone to some type of risk at some time in their lives. Always remember: No one is immune. 

Pros: 

• Protects people, home, other possessions

• Protects your finances

• Reduces stress

Cons:

• Unnecessary coverage. There are many types of insurance that are not needed, or you can have too much -- or not enough -- coverage.

• Having to keep up with premium payments.

How exactly does insurance work?

Once you have decided what you need to insure, it is important to meet with an insurance agent to discuss the different options and coverages available. Coverage will depend on what state you live in, whether you rent or own your home, whether you own a car, and much more. Basically, insurance helps people recover from certain types of financial consequences by pooling the resources of a large group, to pay for the losses of a small group. 

Everyone who purchases insurance coverage will have to pay premium payments to keep the coverage. The amount of one's premium payment is dependent on many things, such as age, gender, where they live, health, occupation, and much more, depending on the type of insurance they are seeking. These premium payments will cover any anticipated losses. The insurance company uses this money to pay any claims that may arise from any of their customers. So, the losses and expenses are shared by everyone.

Insurance companies use statistical analyses to project what actual losses will be in any given group. For example, when it comes to auto insurance, a customer's rates will all depend on their driving record. The better the driving record, the better the rates, and this is one of the many things that the insurance company is going to look at. The insurance industry is well versed in all the many areas, including how much money to set back in order to pay the claims, while still being profitable. 

Once you have decided which insurance coverage you need, a policy will be drawn up. This policy is a legal binding contract. It is important to take the time to read all of the fine print and to make sure that you understand exactly what you are purchasing. Should you have any questions, be sure to ask your insurance agent before signing all of the paperwork. Since this is a legal contract, once it has been fully executed, it cannot be changed. 

Common basic insurance terminology

Below is a list of common terms used in the insurance industry:

• Insurer – This is the insurance company.

• Insured – This is the customer who pays the premium and will be compensated for any loss that is covered under their insurance contract.

• Bound – This is the term that is used once all parties have agreed to the terms in the insurance contract and it is in place.

• Rider – This is an amendment, or attachment, that alters the insurance policy's terms.

• Adjuster – This is a person who investigates any claims made and recommends settlement options. Many times, both the insurance company and the customer(s) involved will use their own adjuster, and then they will all work together to agree on a fair settlement.

•  Agent – This is a person who sells insurance through a large insurance company.

• Deductible – This is a portion of the loss that the insured needs to pay. For example, some common deductibles are $500, $1,000, and more. In theory, the higher deductible an insured has the lower premium they will pay.

• Effective Date – This is the date the policy goes into effect.

• Lapse – Termination of a policy due to missed premium payments.

• Policy Period – This is the time period which the insurance is in effect. Normally, this is for six (6) months at a time.