Insurance can be classified as either private or government insurance. Private insurance includes life and health insurance and property and liability insurance. Government insurance includes social insurance programs and other government insurance plan.
Life Insurance; At the end of 2010, 917 life insurers were doing business in the United States, down from a peak of 2343 in 1988. The decline is due to mergers and consolidations to reduce operating costs and general overhead and to increase efficiency.
Life insurance pays to death benefits to designated beneficiaries when the insured dies. The benefits pay for funeral expenses, uninsured medical bills, estate taxes, and other expenses. The death proceeds can also provide periodic income payments to the deceased’s beneficiary. Life insurers also sell annuities, individual retirement account (IRA) plans. Some life insurers also sell individual and group health insurance plans that cover medical expenses because of sickness or injury; disability income plans that replace income lost during a period of disability; and long term care policies that cover care in nursing facilities.
Health Insurance; Although many life insurers described above also sell some type of industrial or group health insurance plan, the health insurance industry overall is highly specialized and controlled by a relatively small number of insurers. About 35 health insurers write most individual and group health insurance plans sold today.
Property and Liability Insurance; In 2020, there were 2689 property and liability insurers in the United States. Property insurance indemnifies property owners against the loss or damage of real or personal property caused by various perils, such as fire, lightning, windstorm or tornado. Liability insurance cover’s the insured’s legal liability arising out of property damage or bodily injury to others; legal defense costs are also paid.
Property and liability insurance is also called property and casualty insurance. In practice, non life insurers typically use the term property and casualty insurance to describe the various coverage’s and operating results. Casualty insurance is a broad field of insurance that covers whatever is not covered by fire, marine and life insurance; casualty lines include auto liability burglary and theft workers compensation, and health insurance.
Personal Lines; Personal lines refer to coverage’s that insure the real state and personal property of individuals and families provide them protection against the legal liability. Major personal lines include the following;
- Private passenger auto insurance protects insured against legal liability arising out of auto accidents that cause property damage or bodily injured to others. Auto insurance also includes physical damage or loss resulting from a collision,theft, or other perils. Medical expense coverage and uninsured motorist coverage are also available.
- Homeowner’s insurance is a package policy that provides property insurance and personal liability insurance in one policy. There are a number of homeowner’s policies available that cover the dwelling other structures and personal property against loss or damage from numerous perils.
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