Insurance is protection against possible financial loss. Since you cannot predict the future, you never know when something terrible might happen to you or your property. Insurance allows you to be prepared for the worst.
Insurance gives you peace of mind and protects you from financial loss when trouble strikes. In addition, it protects against many risks, such as unexpected property loss, illness, and injury. Although many kinds of insurance exist, they all have several characteristics.
An insurance company, or insurer, is a risk-sharing company that agrees to pay for losses that may happen to someone it insures. A person joins the risk-sharing group by purchasing a contract known as a policy. The purchaser of the insurance policy is called a policyholder. Under an insurance policy, the insurance company agrees to take on the policyholder’s risk. In return, the policyholder pays the company a premium, which is an insurance fee. The protection provided by the terms of an insurance policy is known as coverage, and the person protected by the policy is known as the insured.
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