Back to blogUpdated · 1 min read

Insurance

Definitions

Insurance is something that you buy to protect yourself against losses you will suffer if certain things happen to you, like if your car gets stolen, your house burns down or you get sick or pass away.

What are the main types of insurance?

There are many different types of insurance, but the main types of personal insurance are:

  • Life insurance: Pays out an amount in the event of your death or on a specified date.
  • Disability insurance: Pays out a single or monthly amount if you become disabled and can no longer work.
  • Car insurance: Protects you against financial losses you might suffer as a result of owning a car.
  • Home and content insurance: Protects you against financial losses you might suffer as a result of owning a house.
  • Medical insurance: Protects you against the cost of various medical treatments you or your family might need.

Why do I need insurance?

Insurance helps you to focus on the things that really matter. Rather than worrying about where the money will come from to look after your family if you die, where you will find the cash to repair your car after a crash or how you will rebuild your home if it burns down. By covering these losses, it also allows communities to grow, especially if many people are all affected at the same time, with things like floods, cyclones, or widespread fires.

How does insurance work?

When you buy an insurance policy, you are making regular monthly payments called premiums to your insurer. If you suffer a loss that is covered by your policy, your insurer will return you to the position you were in before the loss happened. The monthly premiums that you pay are pooled together with the money received from other policyholders. It is from this pool that any claims you make are paid out.

SHARE

You might also like

Definitions

Building insurance

Building insurance protects your actual building and its fixtures against things like fire, explosions, Mother Nature, burst geysers, theft, malicious and accidental damage, and even subsidence and landslip.

1 min read
Definitions

Malicious damage

Malicious damage is damage caused to one person’s property on purpose by another person. For example, if someone deliberately scratches your car with keys or kicks a dent in your car door.

1 min read
Definitions

Car insurance

Car insurance is essentially financial protection for bad things that can happen when you own a car – bad things like damage to, or the theft of, your car or being held financially responsible for damages to another person’s property that were caused by your car.

1 min read