Insurance: Definitions and Types

Insurance:

Insurance is the business of protecting people from the financial consequences of large and small risks. This may include risk from a possible accident, liability from an injury, or protection against a sudden financial fluctuation. The activities typically undertaken to achieve these goals are called insurance contract: for example, an insurance policy issued to cover different levels of protection for a certain amount of money.

The top ten types of policies in the United States according to Aetna are as follows:

-Auto Insurance

-Health Insurance

-Homeowners Insurance

-Life Insurance

-Long Term Disability Insurance

-Medicare Supplement Policies

-Property & Casualty Insurance (or Homeowners)

-Retirement Plans (Pension)

-Retirees' Health Coverage in Retirement Plan After Age 65 or Retirees' Medicare Supplement Policies (Medicare Part D) and Medicare Advantage Plans including Private Fee For Service

Read More About>>Benefits of Health Insurance

Insurance is a contract between an individual or entity and another party that promises to compensate the first-mentioned party in the event of a loss. Insurance is one of the most important financial services that people can use. It helps individuals and organizations to protect their assets against unforeseen events and losses. Insurance is also used by businesses to protect their assets, such as property, equipment, inventory, or other intangible assets like intellectual property. 

There are two main types of insurance policies: 

1) Life insurance policy covers death of the insured person; 

2) Property insurance covers damage caused by fire, theft, storm, or other natural disaster. 

READ MORE: Health insurance

In insurance, the person or organization being insured is known as a policyholder. The party that brokers the contract with the policyholder, and bears most of the risk for any claims made against the insured, is known as an insurer. Other parties may include professionals who advise on insurance contracts such as actuaries and loss adjusters.