DEFINITION OF INSURANCE COVERAGE

Insurance needs are a fact of life in both business and our personal affairs. Nearly everyone in the industrialized world carries some sort of insurance. Many people carry several different types of insurance. In some professions, insurance is a necessity. In cases of a mishap, or even deliberate harm, insurance can mean the difference between getting back on one's feet or never recovering.

Health Care

A major form of insurance coverage is health care insurance. Health care insurance covers treatment for illnesses and accidents. Many policies also cover preventative care. Health care coverage is designed to protect individuals against the excessively high costs of paying for treatment out of pocket. It is often covered by employers, but many individuals cover themselves. Medicare and Medicaid are federally issued health care coverage programs. Some states also have health care programs, more often for children. Nonetheless, nearly 46 million Americans had no health insurance coverage at all in 2007, according to the National Coalition on Health Care.

Life Insurance

Life insurance is designed to cover the final expenses, including funeral expenses and bills, of the policyholder upon his death. It can also provide a means for a policyholder to provide for his heirs financially. Life insurance is issued either as a term policy, which does not build equity but which generally has lower premiums, and whole life insurance, which does provide equity the policy holder can borrow against. Whole life policy premiums are generally more expensive than term insurance.

Property Insurance

Property insurance is designed to provide the means to repair or replace items of value in the event of an accident, natural disaster or deliberate acts. Homeowner's insurance, renter's insurance, automobile insurance, flood insurance and insurance for individual items of value such as jewelry or musical instruments are all classified as property insurance.

Business Insurance

Many business owners carry insurance for their commercial enterprises. They may insure their inventory, office facilities or manufacturing equipment. In a partnership the partners may take out insurance policies on one another in the event of the untimely death of one or more of the partners.

Liability Coverage

The most commonly known form of liability coverage is malpractice insurance for physicians, which is nearly universally required as a condition to practice medicine. Many states require drivers to carry automobile insurance as a condition of driving. Some property insurance policies also protect homeowners and apartment dwellers from financial responsibility in the event a visitor suffers an accident or causes damage.

Disability Insurance Coverage

Disability insurance protects the policyholder against the loss of income if he or she becomes unable to work due to illness or injury before reaching retirement age. Disability insurance can be issued as a long term or short term policy.