TIPS FOR INVESTING IN INSURANCE POLICIES

Investing in the form of payment of premium against various types of insurance policies is considered to be one of the best types of investments. Insurance is a form of risk management provided by a company against certain payment (usually called insurance premium) by a person(s) usually called insured(s) for one of the various types of insurances where in the case of certain loss of person or property of the insured(s) the insurance company pays certain amount to the insured (or his/her nominee(s) in accordance with the agreement laid down in the terms and conditions of a certain insurance policy. Major benefits of such insurances is that the insured gets additional extra money for the losses sustained by them. In the cases of losses of property the insured himself gets compensated while in the case of death of the insured his beneficiary or beneficiaries. Insurance is done all over the world mostly by local companies in accordance with terms and conditions of each country. In order to cover themselves against potential losses the insurance companies get themselves insured with international companies and the insurance done by them is called Reinsurance.

Amongst several types of insurance coverage the following are the most important ones a brief description of which is given below:

• Life Insurance: This type of insurance is done by an individual for insurance of his/her life where in the case of death of the individual certain amount as per terms of the insurance policy is paid to the nominated beneficiary(s) of the insured. However, in the case of the maturity of the policy certain amount as per terms of the policy is paid to the insured. Term Life Insurance provides for covering the current family or business needs. On the maturity of that period the insured can either drop the policy for pay annually increasing premium to continue the coverage. The insured’s beneficiary gets full benefit of the coverage in case of death.

• Death Insurance or Accidental Death Insurance or Disability Insurance: This type of insurance policy is usually done by a company for their employees where in the case of death by accident or otherwise a certain amount is paid to the nominated beneficiaries of the insured. In the case of disability insurance, certain amount as per terms of the insurance policy is paid to the insured.

• Health Insurance: provides for medical facilities locally or abroad of the insured persons depending upon the terms and conditions of the insurance policy. International travel health insurance and international assistance for expatriates are also provided by some international companies.

• Auto Insurance/Car Insurance: provides for coverage of the financial loss to the insured in the event of an accident of the car, injuries and damages caused by an accident and also the repairing and replacement of the vehicle.

• Homeowners Insurance: provides for coverage of the home and other structures on the property.

• Annuities: An annuity is a contract in which an insurance company promises to make a series of payments in exchange for a single deposit or a series of payments during your earning years. Annuities help protect against outliving your earning years or your retirement resources. Compound interest is credited to these payments and the earnings are not currently taxed during the accumulation period, which is an important reason why people purchase annuities. Reference: http://www.farmers.com/life_insurance_annuities.html

• Variable Annuities: not only offer protection in retirement, but potential appreciation while working toward that day. It's a long term investment product that allows your investment to grow in value in market-based investment options and offers you a guaranteed income stream when annuitized in retirement. http://www.farmers.com/variable_annuities_insurance.html

• Credit insurance: repays some or all of a loan when certain things happen to the borrower such as unemployment, disability, or death.

• Mortgage insurance: insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt.
http://en.wikipedia.org/wiki/Insurance#Credit

• Travel Insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, loss of personal belongings, travel delay, personal liabilities, etc.

• Structured Settlements: A structured settlement is a financial or insurance arrangement, including periodic payments, that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation. Structured settlements were first utilized in Canada and the United States during the 1970s as an alternative to lump sum settlements.
http://en.wikipedia.org/wiki/Structured_settlement