Casualty insurance
Casualty insurance insures against accidents, not necessarily tied to any specific property. It is a broad spectrum of insurance that a number of other types of insurance could be classified, such as auto, workers compensation, and some liability insurances. Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury. Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
Terrorism insurance provides protection against any loss or damage caused by terrorist activities. Kidnap and ransom insurance is designed to protect individuals and corporations operating in high-risk areas around the world against the perils of kidnap, extortion, wrongful detention and hijacking. Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions could result in a loss. The program was extended until the end of 2014 by the Terrorism Risk Insurance Program R Act. In the United States in the wake of 9/11, the Terrorism Risk Insurance Act 2002 set up a federal program providing a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism.
Life insurance
Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. In most states, a person cannot purchase a policy on another person without their knowledge. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.In many countries, such as the United States and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against.