Hedging risk: The main purpose of insurance is the hedge the risk of loss. The risk-bearing onus is shifted from the owner of the insured item also referred to as the insured to the insurer. A policy premium is paid to the insurer and in return you get a guarantee against larger losses. If a quantity can be attached to a risk, it can normally be insured.

Motor insurance: car vehicle insurance is coverage for events having an negative impact on any vehicles including trucks, cars and motorbikes. Accidents on the road as well as liabilities arising from these accidents are covered by the insurance. The insured party and vehicle as well as other parties involved in the accident can be covered by the policy. All depending on the cover you choose. Individual factors and traits have an affect on the premium paid including your age, sex, marital status and vehicle brand. If you buy a vehicle on lease agreement you are forced to take-out insurance until full loan amount is settled.

Additional payments: In addition to your monthly premium you will have to pay a lump sum called an excess to gain access to your policy benefit in event of claim. There are two excess types available to the insured either Compulsory or Voluntary Excess. Compulsory Excess is the standard excess type where a basic minimum lump sums are paid to the insurer by the insured, when he or she submits a claim. Voluntary excess is the option where the insured party pays increased excess so that the monthly premium is reduced. Voluntary excess is an add-on to your compulsory excess already payable.

Hazard Insurance: Hazard Insurance is also known as Home Insurance. The insurance combines personal as well as liability coverage, thus you are covered in both accidents as well as losses related to homes, buildings and structures. One premium per month is enough to cover all hazards specified in the policy. Your premiums will be calculated on the amount of money it will take to rebuild or replace the building or structure. You need not only cover your buildings in the policy but also related items.

Special cover required: Note that some events are excluded from insurance. These are referred to as “Acts of God”. These events call for additional or special coverage attracting separate or increased premiums.

Life Insurance: Life insurance is dependant upon the death or disability of the insured for benefits to be paid to the named beneficiary. You’ll find many types of life like term or permanent. Permanent forms like, whole life insurance or universal life insurance can be complicated. The benefit is usually in form of a lump sum amount. However funeral expenses and other bills can also be paid in terms of the policy. Premiums either monthly or in lump sum are payable in return for the benefits to be paid. The insurance contract has certain inclusions as well as exclusions covering both the insured and insurer.

Fixed Annuity: Annuities are a subset of life insurance. They can take the form of a fixed annuity like an indexed annuity, immediate annuity, or the like. They all specialize in saving or paying out.

Health Insurance: Health insurance is taken-out for the purpose of covering medical expenses such as doctors, medication or clinics. The insurance can be State provided or by commercial companies. Both individual or group coverage is available. It is extremely popular for companies to invest in group health insurance as benefit for employees. The policy can include disability as well as nursing. Premiums or taxes are paid monthly by members to get the benefits in return.

Restrictions: Exclusions are applicable where some services are not covered. The insured will have to carry full cost of these services. Limits do also apply, where services are only paid up to certain amount the rest will be carried by the insured.