There are two different types of insurance:
Life insurance: pays a lump sum or regular payments to your family, if you die during the length of your policy.
Life insurance companies sometimes provide pension schemes – a special kind of savings plan. You save a little of your income regularly whilst you are working, which can then be used as an income in later life when you want to work less or retire.
Life insurers also sell an insurance policy called an annuity. This provides a guaranteed income for the life of the pensioner and stops the worry of using up all of their savings.
General insurance: protects ourselves and the things we care about, such as cars, homes and belongings – anything other than Life insurance.
General Insurers are responsible for insuring against large catastrophes such as natural disasters. They are also at the forefront of responding to emerging risks, such as cyber risks and climate change.
General insurance policies are typically much shorter – many are renewed annually.
For a customer, there are three steps to insurance: