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Insurance, common types of insurance, insurance reduce your financial risk

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Insurance, common types of insurance, insurance reduce your financial risk

What is insurance?

Insurance is a way to manage anyone’s risk. When anyone buy insurance, he / she / they purchase protection against unexpected financial losses.

So, we can say, Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.

The insurance company pays someone you choose if something bad happens to you. If you have no insurance and an unwanted accident happens, you may be responsible for all related costs. Having the right insurance for the risks you may face can make a big difference in your life.

 

How does insurance reduce your financial risk?

Imagine you are driving a car and you hit a deer, which damages your car. If you have the right kind of auto insurance policy, the insurance company will pay the costs of the car repairs (deducting some pay).

Now, simply think, a water pipe bursts in your bathroom, ruining everything in that room and in the bedroom next to it. Generally, if you have homeowner’s or renter’s insurance, the insurance company will pay to replace some or all of the damaged property, once you pay your deductible. Insurance policies will only pay for things that are described in the policy.

What are common types of insurance?

There are many types of insurance in Bangladesh, but some common types are described here.
First- Health: It Helps you pay for doctor fees and sometimes prescription drugs. Once you buy health insurance coverage, you and your health insurer each agree to pay a part of your medical expenses.

Second- Life: Life insurance pays a person you select a set amount of money if or when you
die. The most important that, the money from your life insurance policy can help your family pay bills and
cover living expenses.

Third- Disability : Protects individuals and their families from financial hardship when any kinds of illness or injury prevents them from earning a living.

Fourth- Auto: It protects you from paying the full cost for vehicle repairs and medical expenses due to a collision.

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