Insurance & The Types
- Insurance is the means by which people gain financial protection against unexpected events.
- People pay an annual or monthly amount (a premium) to an insurance company and the insurance company pays out a sum to cover losses or costs if an unexpected event occurs.
- The company that arranges and provides the insurance cover is called the insurer. The person or group that pays the premium and is covered by the insurance is the insured.
Health Insurance |
Contents |
Income Protection
Explaining Insurance
HOUSEHOLD INSURANCE
Home insurance — covers a home against damage and destruction to the building from various causes, such as storms, fire or accidental explosions. It is very important that the inclusions and exclusions are very carefully noted; for example, most policies
will not cover flood damage.
Home contents insurance — provides compensation if your home’s contents (such as furniture) are damaged or stolen
PERSONAL INSURANCE
Life insurance — the most common form of life insurance is term insurance. This policy covers a person for a set time. If the person dies within this time span, the insurance company will pay a specified amount to the next of kin or other nominated person.
Sickness and accident insurance — usually taken out by self-employed people who are not covered by workers’ compensation and do not receive pay for sick leave. It provides cover if a person cannot work and thus receive their normal income.
Health insurance — in Australia, everyone is covered for basic medical costs by a government health insurance scheme called Medicare. However, if people wish, they may take out additional private health insurance cover to provide special benefits, such as orthodontic expenses.