Insurance is a type of risk management practice done for appraising and controlling against the risk of a contingent or uncertain loss. It is defined as transferring the risk of a loss from one entity to another in exchange for payments. Insurance is sold by insurance company to a policy holder who might be a person or an entity buying the insurance policy. Premium is the amount to be charged for a certain sum of insurance cover depending on the insurance rate. There are many types of insurance like home insurance, health insurance, auto insurance, causality insurance including political risk insurance and crime insurance, accident, sickness, unemployment and disability insurance, disability overhead insurance, total permanent disability insurance, workers’ compensation insurance, life insurance, burial insurance, property insurance including flood insurance, inland marine insurance, earthquake insurance, home insurance, lanlord insurance, crop insurance, aviation insurance, fidelity bond, terrorism insurance, windstorm insurance, surety bonds, volcano insurance and boiler insurance.

Liability insurance includes directors and officers liability insurance, errors and omissions insurance, public liability insurance, prize indemnity insurance, environmental liability insurance, professional liability insurance. Credit insurance includes accounts receivable insurance and mortgage insurance. Other insurance schemes include bloodstock insurance, business interruption insurance, all-risk insurance, collateral protection insurance, expatriate insurance, defense base act, kidnap and ransom insurance , locked funds insurance, legal expenses insurance, livestock insurance, pet insurance , nuclear incident insurance, media liability insurance, purchase insurance, title insurance, pollution insurance and travel insurance.

Disability insurance includes the policy holder’s paid sick leaves, short-term and long-term disability benefits and covers the risks that disability may result in hampering the income of the policy holder. Types of disability insurance includes individual, high-limit, key person, business overhead expense and national programs disability insurance schemes. Individual disability insurance are meant for those self-employed people whose employers do not provide any insurance benefits. These people can purchase their own polcies from the open market and premiums and benefits vary from company to company and location to location. High-limit disability insurance offers individual benefits at 65 percent of income irrespective of the income level of the individual. Key person disability insurance offers cash benefits to companies to move forward and maintain profits in the event of loss of key employee due to any disablility.

Sickness and accident insurance is meant to provide an insurance cover with monthly payment if the policy holder is unable to work as a result of long-term sickness or incapacity caused due to any accident. Many insurance companies offer sickness and accident policy insurance quote at different premium rates. Several companies presents a detailed comparsion report of sickness and accident insurance policies offered by many insurance companies. The person seeking insurance plan must ensure to do a thorough research on the various offers, policies and prices of these insurance companies and get an insurance quote for the best policy at the best premium rate. If a person gets confused about various insurance policies offered by different insurance companies, then he or she should look for the policy that covers the maximum expenses.

Income protection insurance is offered by the insurance company and helps the policyholder who becomes incapacitated due to serious illness or an accident and is unable to work and earn his or her living. This type of insurance usually contains a deferred period and a proportionate benefit which may delay the onset of benefits and pay the policyholder a reduced benefit if he or she agrees to work on part-time basis or take up a lower level paying job. 60 percent to 70 percent gross earnings of the policyholder are covered under the benefit limits of the insurance cover. If the policyholder is incapacitated, he or she may be granted a waiver of premium during that period. But, not all policies grant waiver of premium and are dependent upon the premiums being made each month whether or not the policy holder can hold down a job or not. If the benefits are paid through an employer, they come under the category of taxable income, otherwise the benefits are usually not considered to be taxable income. The income protection insurance is not meant for people who are past retirement age. This insurance policy covers only those adults who are still working at the time of any incapacitation caused due to an illness or accident that has made them unemployed.

Disability insurance is meant for a person who has a family and has commitments like mortgage on home. This insurance insures the policyholder’s earned income against the risk of a disability that may result in working and earning difficult or impossible. Disability insurance cover may include paid sick leave, short-term benefits and long term disability benefits. Since disability insurance is meant for employees, many companies offer disability coverage to their workers. But, disability insurance cover depends upon the extent of disability or incapacitation and often times it is not enough to cover what is needed.

Factors like age, health status, occupation, earned income, employment status and whether the policy holder is a smoker or not affect the premium rates for the income protection insurance. Therefore, it is suggested that a person should look carefully at how the policy defines incapacitation or disability. Income protection insurance helps the policyholder against the tide of rising bills if he or she loses a job. If a person gets sick, this policy will allow making the payments once the paid employment has ceased.

There are many insurance companies offering these types of disability and income protection insurance policies on internet and offline. One should have a careful understanding of the policy, insurance quote, premium rates, benefit limits, eligibility and other factors before finalizing any deal. Other than that, “which one is the right policy that offers the maximum insurance cover” and “for how long are these policies offer such benefits” are few important questions that should be on the priority list of the person looking for an insurance policy. For example: income protection insurance covers 60% to 70% of the policy holder’s gross earnings, where as sickness and accident insurance provides up to 75% of the salary if a person suffers from sickness or accident.