INTRODUCTION
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the
equitable transfer of the risk of a loss, from one entity to another, in
exchange for payment. An insurer is a company selling the insurance; the
insured, or policyholder, is the person or entity buying the insurance policy.
The amount to be charged for a certain amount of insurance coverage is called
the premium. Risk management, the practice of appraising and controlling risk, has evolved as a
discrete field of study and practice.
A
promise of compensation for specific potential future
losses in exchange
for a periodic payment.
Insurance is designed to protect
the financial well-being of an individual, company
or other entity in the case of unexpected loss.
Some forms of insurance are required by law, while others are optional.
Agreeing to the terms of an insurance policy creates a contract
between the insured and the insurer.
In exchange for payments from the insured (called
premiums), the insurer agrees
to pay the policy
holder a sum of money
upon the occurrence of a specific event. In most cases, the policy holder pays
part of the loss (called the deductible), and the insurer pays the rest.
Examples include car insurance, health insurance, disability insurance, life insurance, and business insurance.
Types
of Insurance
This table shows the type of insurance and their functions
below;
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Types of insurance
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