Insurance

Insurance is a way that different people of different walks of life pool their financial resources to take care of each other when the unforeseen happens. Insurance is meant to protect individuals and their loved ones against the unpredictable. Many times, what an insurance policy covers is guaranteed or expected at some point to happen--such as in the case of life insurance. Other times, insurance provides coverage against something which might very well happen, but which also might not happen at all. Consider an automobile accident event. Statistically, every single driver can expect to be in at least one accident of one degree or another during their driving years--but, it's not a guaranteed event, like death is.

When you buy an insurance policy, no matter what type, what you have done is to protect yourself against the unknown, at least financially. Either you don't know when or where a certain event will happen to you at the time that you buy the coverage, or you don't know even if it will for a certainty. If the latter is the case, then you buy insurance because human experience has shown that the likelihood of its taking place is great enough that you need to be prepared for it. This often means that your personal circumstances or conditions are highly important. For instance, a professional piano player might buy what is known as "limited lines" insurance, which would require premiums to be paid to protect him against an event that harmed or injured his fingers so badly that he could not play the piano any more.

So, insurance is protection against the unexpected. Even if you know that the event is going to take place, as with death, or has a high probability of taking place, as with a car accident, you still never know when it will take place. And that's the problem. You just don't know.

Those who produce insurance products know that financial problems that come from events can add deeply or even catastrophically to the emotional tensions or problems that stem from the event. They have come up with different insurance products to handle different possibilities and contingencies. Different premium amounts are used for different levels of coverage.

Health Insurance

Health insurance is problematic--because it doesn't really act like insurance as it currently is. Most of the characteristics of insurance don't apply to today's health insurance. The premiums are outrageously high instead of relatively low. Health insurance seeks to cover almost everything a person does, including routine check-ups to doctors and covering every prescription drug--which is not the job of insurance at all; insurance policies are characterized by having fairly high deductibles, or amounts of money that must be paid out of pocket, before the insurance kicks in (life insurance is an exception, but for an obvious reason).

But, regardless of the above, health insurance is in place to pay for medical care. Modern medical care can be astonishingly expensive, since it costs a great deal of money to produce (developing and bringing to market just one pharmaceutical costs an average o $800 million, for just one example). Without your health, you don't have much. You cannot enjoy life and you may not be able to work and make money. If you have something unexpected or catastrophic happen to you healthwise, you are in major trouble. Health insurance is there to help you when you could be financially destroyed.

Health insurance is often paid for by someone's employer, perhaps by taking a small paycheck-deducted amount.

Auto Insurance

In many state, this is mandatory. Auto insurance is not meant to cover routine automobile maintenance costs. It is there to basically cover you in case of an accident. On any given day when you drive, you probably will not get into a motor vehicle accident. Yet, there is always the chance. Different policies cover things like collisions with other cars, hitting pedestrians, running off the road and damaging your vehicle, and other events differently.

Life Insurance

Life insurance is the most unique insurance type. This insures against the ultimately inevitable: death. Then, the payout doesn't go to the insured--since he is dead--but it goes to named beneficiaries who are still alive. Life insurance proceeds are not eligible to be taxed.

Life insurance may be paid for by an employee's place of work, but experts agree that people should have their own policies in addition. Life insurance is the least-expensive insurance that you can buy.

Property Insurance

Many lenders make it mandatory for someone to whom they give a mortgage to have property insurance. This protects you financially against catastrophic events that severely damage your house or, perhaps, to other real estate or your belongings that are kept on the grounds or in the house, like a hurricane, tornado, flood, or fire. If you don't own your home, you should get renter's insurance, which protects you in a similar way.

Insurance, once again, is a necessary part of an adult person's life. Even if certain insurance policies are not mandated by law, depending on your personal circumstances you should still get them. You never know when you may need their help--and that's the point.property insurance. This protects you financially against catastrophic events that severely damage your house or, perhaps, to other real estate or your belongings that are kept on the grounds or in the house, like a hurricane, tornado, flood, or fire. If you don't own your home, you should get renter's insurance, which protects you in a similar way.

Insurance, once again, is a necessary part of an adult person's life. Even if certain insurance policies are not mandated by law, depending on your personal circumstances you should still get them. You never know when you may need their help--and that's the point.

 

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