Insurance is a very important tool for
managing personal finances. It helps in handling risks that faces property.
An individual insures against personal risk.
This is done in order to be safe and eliminate the ability to earn income as a
result of old age, death, unemployment and disability.
Property
Risk: This is associated with destruction of
property, theft or damage of material wealth. An individual can insure against
direct and indirect loss. It is advisable to insure business assets stored at
home separately.
Liability
risk: This is associated with punitive damages
that may be caused by negligence or carelessness hence leading to damage of
property or cause personal injury.
Life
Insurance
There are two types of life insurance. The
first one is term insurance and permanent insurance. Term insurance just covers
the life of an insured person for a pre-determined period of time. This can be
10 years or more. On the other hand, permanent insurance is covers the life of
the insured until death.
Disability
Insurance
Most people can agree with that a large
number of people in the developing world are actually under-insured. That means
those people are actually exposed to a lot of risks in life. Therefore, there
is a likelihood of being disabled at some point in life.
Health
Insurance
This type of insurance is used to pay for
medical care at home or in an institutional setting. In Kenya there are several
families taking care of people with permanent physical or mental illness. That
means that there are several people who are not only disable but also frail.
Property
Insurance
There are two common types of insurance. That
is motor and home insurance.
Motor
Vehicle Insurance
All motor car owners are required by the law to
be in purchase liability insurance for their motor vehicles. This insurance
protects the general public from injuries or damages when the vehicles are
involved in an accident.
The minimum amount of insurance changes from
one country to another.
Home
Insurance
This is an insurance policy that covers your
home form damage from fire. There are some plans that cover all types of risks
while the rest are very specific hence covering fire, vandalism and theft
separately.