Types of Insurance

Life

Life insurance comes in two types: Whole Life Insurance and Term Life.

Term Life insurance policies are always less expensive and are a straightforward type of insurance policy that is only effective for a specified term. You pay premiums for the term - usually 5 to 30 years - in exchange for a benefit payment to be made to your beneficiary in the case of your death. When the policy comes to an end, you are no longer responsible for payments, and the insurance coverage expires.

Whole Life insurance policies are designed to last from the time you start the policy and provide coverage for you until you die - though you may not have to make premium payments the entire time. Whole life policies are more expensive than term life policies because they also come with a cash account that you are paying into along with your premiums. This cash account comes with various benefits that you can take advantage of once you've made enough payments to it.

Homeowners

Homeowners insurance policies protect property and home owners from damage to their property or injuries to others who may be on their property, as well as providing liability coverage in case your property (such as a falling tree) damages someone else's property.

Renters

Renters insurance is like homeowners insurance except it usually provides protection only for the personal property in the case of fire, theft, damage from utilities or other catastrophic issues that may arise. Many renters make the mistake of believing that if something bad happens (like a fire in a neighbor's house that spreads to theirs), their landlord has insurance that will pay to replace all of their things. This is rarely the case, however.

Auto

Basic liability insurance coverage is required in all 50 states to various amounts, but auto insurance is offered above and beyond the basic coverage to include comprehensive (repair for your vehicle in an accident), theft, medical insurance payments for you and your passengers and more.

Umbrella

An umbrella insurance policy is usually offered to homeowners and provides coverage above and beyond what the homeowners insurance policy and the auto insurance policy will cover in an accident or mishap. This insurance is usually very inexpensive to provide 1 to 5 million dollars of additional coverage. For help saving money, check out the insurance shopping tips.