What is insurance?
What is Insurance? Insurance is a contractual arrangement between an individual or an entity (the policyholder) and an insurance company. It is designed to provide financial protection against potential losses or damages that may occur in the future. In exchange for regular payments called premiums, the insurance company agrees to compensate the policyholder for specified losses or liabilities as outlined in the insurance policy. The concept of insurance is based on the principle of risk management. It allows individuals or businesses to transfer the potential financial burden of unexpected events, such as accidents, natural disasters, or other unforeseen circumstances, to the insurance company. By pooling premiums from many policyholders, the insurance company can effectively distribute the risk among a larger group, making it more affordable for individuals to handle potential losses. Insurance policies come in various forms and cover a wide range of risks. Some common types of ins...