Insurance 101

Insurance 101: Your Guide to Understanding the Basics

What Is Insurance?

Insurance is a contract between you and an insurance company. You pay a set amount (called a premium), and in exchange, the company promises to provide financial protection in the event of a covered loss.

Purpose: Reduce financial uncertainty and provide peace of mind.

How It Works: Many people pay into the system, and the insurer uses those pooled funds to help those who experience a loss.

Why Insurance Matters

Life is full of uncertainties — from medical emergencies to accidents and unexpected events. Without insurance, these costs could derail your financial stability.

Insurance helps you:

Protect your income and assets.

Cover expenses you couldn’t pay out of pocket.

Support your family’s lifestyle and future goals.

Avoid dipping into savings or retirement funds.

Common Types of Insurance

Life Insurance

Provides a lump-sum benefit to loved ones after your passing, replacing lost income and covering expenses.

Health Insurance

Covers medical expenses, from doctor visits to hospital stays and prescriptions.

Disability Insurance

Replaces part of your income if you’re unable to work due to illness or injury.

Long-Term Care Insurance

Helps pay for care in a facility or at home when you can’t perform daily activities.

Critical Illness Insurance

Provides a lump-sum benefit if you’re diagnosed with a serious condition like cancer, heart attack, or stroke.

Indexed Universal Life

Flexible permanent life insurance that builds cash value based on market indexes, offering both protection and potential tax-advantaged income.

How to Choose the Right Policy

1. Assess Your Needs: Consider your income, dependents, debts, and lifestyle.

2. Understand Coverage Options: Compare different policies and benefits.

3. Work with a Trusted Advisor: A licensed professional can help customize coverage to your goals.

4. Review Regularly: Life changes — make sure your coverage changes with it.

Key Insurance Terms to Know

Premium: The amount you pay for your insurance policy.

Deductible: What you pay out-of-pocket before insurance starts covering costs.

Coverage Limit: The maximum amount your policy will pay.

Beneficiary: The person or entity that receives the payout from a policy.

Rider: An add-on that customizes your policy for additional benefits.

Operational Excellence

At Ai Merchantry, we believe insurance isn’t just about protection — it’s about empowering your future. We take the time to explain your options, design a plan that fits your life, and help you adjust it as your needs evolve.

Our process includes:

Personalized Planning with tools like AiM Asset-Map™.

Fast, Easy Quotes with QuriosityQuote™.

Comprehensive Strategies that integrate insurance with wealth, tax, and retirement planning.