A4 Different Insurance Products
An insurance policy is an agreement between yourself and an insurance company whereby you make regular payments them with the agreement that they make a large payment back to you in the event of a specified accident, event or issue that may lead to a very large expense. If the accident, event or issue does not occur, you do not receive a payment. Some people may choose not to take out insurance to save money and hope that nothing goes wrong.
Car insurance is coverage you arrange when you buy a car. You will make small monthly or annual payments. If your car is stolen, vandalised or if you are in a car accident, your insurance company may cover the costs associated with this. For example, car repairs, hospital expenses or a new car.
Home and Contents insurance covers you when you buy or rent a home. You make small monthly or annual payments and if there are events such as a burglary, fire or flood, the insurance company may cover the costs of repair or replacement.
Life Assurance and insurance are policies you pay into throughout your life that pay out to your families or any specified recipient when you pass away. You may choose to pay into one of these policies so your partner and/or children can continue to pay the mortgage and other expenses when your salary contribution is removed from the household income.
Travel insurance is a policy you may pay for each time you go on holiday. If you are injured or any of your possessions are lost or stolen whilst on holiday, the insurance company may cover these expenses. Many people see this as an unnecessary additional cost to a holiday but if you break your arm in the USA, your medical costs may be as much as $10,000 or more.
Pet insurance can help cover your vet bills in the event of your pet becoming sick or injured. If your dog is hit by a car, your vet bills could easily be over £2,000. This can be unaffordable for many people who then have to make tough decisions about whether to treat their pets.
People may take out health insurance policies if they want a better provision than the free health care available in their country. In the UK, people can receive free health care with the NHS but organisations such as BUPA offer private health care. You may wish to make regular payments to BUPA and in the event of illness or injury, you may use their services. You may choose this as waiting times for treatment are shorter.
