what is insurance?

Answer 1

Reimbursement in a situation of loss.

I have 2 Life insurance
1 car insurance and
apartment insurance

Answer 2

The simple explanation is that it is a transfer of a risk.

Let's assume that we have 1000 identical houses, each worth 250,000 not counting the lot. Over the past ten years, one of these houses has burned to the ground each year.

From such figures, we know that someone is going to lose $250,000, but we can't know who until it happens. That's the risk.

If each homeowner were to put $250 into the same fund at the start of the year, that would provide the $250,000 to rebuild the home of whichever unfortunate family suffers the loss.

That's the concept of insurance. Insurance companies study the statistics, and figure out how much each homeowner puts into the fund, based on value of the home, and any other factors that increase or decrease the risk. The homeowner, by paying the premium, transfers their risk to the insurance company.

Answer 3

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

Answer 4

Basically, insurance is a contract between insurer (the company) and client (policy holder) that insurer will pay certain amount of money to the policy holder when something unwanted happen upon a person/ a property insured. For this service, the policy holder must pay certain amount of money (being called premium) during certain period (usually being stated in the contract). The premium is usually much lesser than reimbursement money.

There are 2 types of insurance: General Insurance and Life Insurance. There is also Health Insurance, but it has a lot of similar features to Life Insurance.

General Insurance is a Contract of Indemnity. It will reimburse you when you suffer loss due to something unwanted happen upon your property. Typical instances of this type of insurance are home insurance, car insurance, or business insurance.

Life Insurance is a Value Contract. The amount of reimbursement is usually predetermined in the contract. There is no enough amount of money in this world that can replace your life, right? Life Insurance is intended to help us in 3 types of calamity: premature death, outliving resources (e.g. living until very old age but cannot make money due to our age), and poor health. For every type of calamity, there is different type of insurance that can protect you. Typical instances for this kind of insurance is your whole life insurance, education insurance, or health insurance.

For life insurance, the life insured can be a different person from policy holder (this is called third-party policy), but policy holder must have insurable interest on life insured (e.g. child-parent relationship).

Maybe you are wondering how an insurance company operates?

Well, they collect all premiums from policyholders in their fund(s). They collect the profit from the fund(s) to run the company and to enhance their capital. For your information, your premium is including distribution cost, i.e. fee to pay administration, agent, etc. Some of the profit is also redistributed to policy holders, depends on their type of insurance. When a life insured is stricken by a calamity, e.g. death, the Sum Insured is paid to him or his family. Of course they have calculated probabilities so that they won't get collapsed due to huge claims.

That is the big picture of insurance. Every country has different regulations, but these are basic things I know. Hope this will answer your question.

Answer 5

American Heritage® Dictionary: Description of insurance
NOUN: 1a. The act, business, or system of insuring. b. The state of being insured. c. A means of being insured.
Additional references: Columbia Encyclopedia, Law.com law dictionary, Wikipedia
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Answer 6

what's up it's da diva here insurance is like morgagr you have to have it and pay it, and also insurance can help you out alot it's just money that you can faal back on in your time of need or you can get your self out of trouble take it from me da diva knows these things you must have insurance on everything your life most imporatntly, your car, and etc. got to run hope i helped love ya smootches.*

Answer 7

refering from the root word ensure...it is a sort of protection from liabilities, e.g. car, housing, education,etc...these are to comfort your life in the the end it beneficial to you/future