Insurance Types

Look at the list of insurance types and variations and then take a time to count how many of them are there. People insure everything they want: it depends on their income, spare time and creativity.

We will review pros and cons of three types of insurance today: life insurance, health insurance and less significant but yet not useless – travel insurance.

Whole life insurance. For many years whole life policies were the predominant type of life insurance sold in America.

Pros. If a life insurance policy holder dies his family members get set benefit upon his death.

Cons. Although the money stored by the insurer in case for your death belong to you, you cannot withdraw them whenever you want like from a bank account. In order to withdraw funds, you can either surrender the policy for its cash value or take the needed funds as a policy loan. If you surrender the policy then you’ll be burden with huge taxes and a policy loan places high interest rates.

Health insurance. Health insurance is a great thing if you can afford it.

Pros. An insured patient gets a different level of service than an uninsured patient. The fact is your chance of dying from a life threatening illness is 7 times greater if you don't have health insurance. Another positive aspect about HMOs is they pay for programs that are aimed at keeping you healthy such as yearly checkups, gym memberships, etc. They do this so that they will not have to pay for more costly services if members were to get sick.

Cons. The disadvantage is giving financial incentives to doctors for limited care and your doctor might try and skimp on your treatment. You can't expect treatment on demand either. Another con to health insurance is most people have to pay for it out of pocket; if it's not provided by an employer.

Travel insurance. I think this is something people invented out of boredom. Troubles and misunderstanding are common things but they are not the end of the world. And if say a plane crashes and a person dies then it’s not travel insurance but whole life one that would be more appropriate. In comparison to this travelling trouble others seem so minor, right?

Pros. It gives you piece of mind: the insurance company reimburses all losses. Travel insurance may provide additional coverage beyond what is available from other sources. For example, it may boost the reimbursement rate for lost, delayed, damaged or stolen bags over airline limits.

Cons. Travel insurance may be unnecessary if you already have adequate coverage from other sources. For example, many credit cards provide holders with travel assistance and travel protection benefits. Travel insurance coverage also has limitations. For example, it will not help you if bad weather puts a damper on your vacation; it won't pay out if you change your mind and decide not to take the trip and the like.

Before buying an insurance policy, first think whether you really need it and then consider all its pros and cons.