Depending on the type of life insurance policy and how it is used, permanent or variable life insurance could be considered a financial asset because it can build cash value or be converted into cash. Simply put, most permanent life insurance policies have the ability to build cash value over time.11
The Bottom Line
Insurance helps to protect you and your family against unexpected financial costs and resulting debts or the risk of losing your assets. Insurance helps protect you from expensive lawsuits, injuries and damages, death, and even total losses of your car or home.
Sometimes, your state or lender may require you to carry insurance. Although there are many insurance policy types, some of the most common are life, health, homeowners, and auto. The right type of insurance for you will depend on your goals and financial situation.
nvestopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate,
A car insurance premium is the amount you pay your auto insurer to protect you and your car. An insurance company determines this amount based on its best guess about your potential to make a claim for reimbursement or to have someone else make a claim due to you causing an accident.
The premium depends on numerous factors, including your selected coverages, driving record, location, and age. You might pay your car insurance premium monthly, every six months, or once a year, depending on your chosen payment plan and how much time your policy covers.
The higher the risk you are to insure, the higher your premium.1 If you fall into the category of a driver who might make any claim—based on your age, driving record, type of car, claims history, car theft in your city, or other factors—the insurance company could charge you a higher premium or decline to cover you.
Drivers paying the highest premiums are single males under age 25 because statistics about millions of drivers demonstrate they have the highest accident rates.2Â In contrast, a middle-aged person without a history of claims, accidents, or tickets will likely pay a lower premium. Statistics indicate that this person is less likely to make a claim.
Depending on the type of life insurance policy and how it is used, permanent or variable life insurance could be considered a financial asset because it can build cash value or be converted into cash. Simply put, most permanent life insurance policies have the ability to build cash value over time.11
The Bottom Line
Insurance helps to protect you and your family against unexpected financial costs and resulting debts or the risk of losing your assets. Insurance helps protect you from expensive lawsuits, injuries and damages, death, and even total losses of your car or home.
Sometimes, your state or lender may require you to carry insurance. Although there are many insurance policy types, some of the most common are life, health, homeowners, and auto. The right type of insurance for you will depend on your goals and financial situation.
nvestopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate,
A car insurance premium is the amount you pay your auto insurer to protect you and your car. An insurance company determines this amount based on its best guess about your potential to make a claim for reimbursement or to have someone else make a claim due to you causing an accident.
The premium depends on numerous factors, including your selected coverages, driving record, location, and age. You might pay your car insurance premium monthly, every six months, or once a year, depending on your chosen payment plan and how much time your policy covers.
The higher the risk you are to insure, the higher your premium.1 If you fall into the category of a driver who might make any claim—based on your age, driving record, type of car, claims history, car theft in your city, or other factors—the insurance company could charge you a higher premium or decline to cover you.
Drivers paying the highest premiums are single males under age 25 because statistics about millions of drivers demonstrate they have the highest accident rates.2 In contrast, a middle-aged person without a history of claims, accidents, or tickets will likely pay a lower premium. Statistics indicate that this person is less likely to make a claim.