Back to blogUpdated · 1 min read

Insurance

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.

You might also like

Definitions

Naked

Naked is the new way to cover your stuff – insurance you control, instantly, without speaking to a call centre.

1 min read
Definitions

Market value

Your car's market value is the value you’d sell your car for if you were to sell it privately. Things like your service history, the mileage on the car, or how old the car is are taken into consideration.

1 min read
Definitions

Business use

Business use in insurance terms refers to you using either your car, home, or another item of yours to earn an income. It’s best to let your insurer know to make sure that you have enough cover or even any cover at all

2 min read