Whole Life Insurance

• Life insurance contracts pay off in the event that the insured person is killed. While the terms of the contract are very specific, pretty much any type of death is covered as long as it's not specifically excluded by the policy. For example, racing drivers may have auto accidents excluded from their policies, while nuclear engineers may find that death from cancer isn't covered for them. This is one of the most common practices in the insurance industry. The underwriting process is the method by which an insurance company assesses the risk of a potential client and writes or denies their plan accordingly. While there are dozens of types of life insurance policies, the two most frequently seen in the United States are whole life and term life plans.
  
  

Term Life Insurance

• A whole life insurance product has a premium that remains level for the duration of the insured person's life, while offering a guaranteed amount of coverage. As long as premiums are paid as required, the policy is guaranteed to pay a claim of a certain amount upon approval.
  
  A term life insurance policy is one in which the premium can fluctuate based on the attained age of the policyholder. Term policies are very flexible, and very inexpensive. There are term policies that maintain a level premium for a defined number of years, then can be renewed at a higher rate at the end of the term, and there are those whose premiums and coverage amounts change annually. Term Insurance grows no cash value and pays no dividends, but the cost savings of such policies are evident and can often be as high as 70 percent below the cost of a similar whole life amount.
  
  

Liability

• Another of the most popular types of insurance coverage in the United States is liability coverage, which does precisely what it sounds like it does. It pays out in the event a person is found at fault for an accident or another unforeseeable event. These types of plans are designed to help protect personal assets that may come under attack if the person has no insurance and a monetary judgment is made against them. Typically, these plans are less stringent in their underwriting requirements than health and life insurance plans because insurance statistics don't change drastically from year to year among a given segment of the populace. Insurance companies base their premiums on the amount of exposure to risk that they'll be forced into with the contract.
  
  

Business Insurance

• Business Insurance is designed to protect a business in the event of a lawsuit or loss. For example, should a primary partner in a business relationship die, the insurance company will pay a claim to the family of the deceased, and the business would revert to the sole partner. These types of policies are very common, and "key man" insurance is increasingly common as well. This type of insurance insures a specific individual within a company, and the claim money is typically used to train a replacement or to inject cash into the business should she be unable to perform the duties of the job. This ensures that the business can survive the loss of a key employee.
  
  

Significance

• Insurance policies protect both investments and personal property. A single insurance policy can prevent financial difficulties in the event of a death, or ensure the safety of personal property in the event of a legal judgment against the insured. Insurance must be sold only by licensed insurance agents who have received training through their state of residence.