What is the purpose of insurance?

Answer 1

To transfer the possibility of a loss (risk) to an insurance company, which in turn spreads out the costs of unexpected losses to many individuals.

Though the purchasing of insurance will not eliminate the risk of death, illness, injury or property damage, it relieves the insured of the financial losses these risk bring.

Answer 2

Purpose Of Insurance

Answer 3

It's a kind of tricky answer. The real purpose of insurance is zero in the most case of insurer but its a beneficial to insurer's family to lead a normal or more than a normal life in terms of life insurance. If the insurer is the income generator of the family then his sudden absence might bring bigger trauma to the family so to mitigate that insurance companies plays a vital role.

Apart from life insurance there are general insurance, motor insurance, accidental insurance, medical insurance, etc.

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Answer 4

Transferring risk from yourself to the insurance company. You go driving hit something, without insurance YOU pay for it but with insurance the Company pays for it. You do have to make monthly premiums in order for the company to take on the risk themselves.

Answer 5

These days, mainly to enrich insurance companies. It was intended to spread risk around among many, but now if there is a significant need for it the companies pushing it refuse to pay what they promised.

Largest lobby in Washington is the insurance lobby.

Answer 6

Insurance is the transfer of risk. You pay a third party to assume responsibility in the event that a loss occurs. You gamble that a loss will occur, they gamble that it won't.

Answer 7

Insurance is a confidence scheme that combines the worst aspects of communism and capitalism.

The idea is to get a large number of people to pay you money every month, in return for the promise to pay out a big chunck of money to individuals when bad things happen to them. Then you invest that money for a reasonable return, and, when someone actually comes to you asking for that big payout, you try every trick in the book to avoid or delay paying, pay only if you absolutely have to, then cancel his policy.

It's a chicken mutual-aid society managed by a fox.

Answer 8

the purpose of insurance is to provide yourself a safety net to help you when the unexpected happens

Answer 9

what kind of insurance.,....the kind of insurance would tell you the purpose....

health insurance gives you medical coverage

car insurance covers you if you are in a car accident or various other things that can happen to your car (what is covered depends on the coverage you select)

renters insurance covers things that may happen to the place you live when you are renting

life insurance leaves something for your benificiary upon your death.


and so on the purpose of the insuarnce depends upon the kind of insurance,

Answer 10

So you don't have to pay the real price to get a checkup, car fixed, house repaired, etc. Would you want to not carry insurance then pay 10 of thousands of dollars if something happen to your house or if you were buying a car and the car got totaled and you have to pay the lender for the car would you have that money just lying around. It's not just a piece of mind but something to save you money if something bad happens.