What is Insurance?

Jennifer·

Insurance

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At a Glance

SubjectInsurance

This resource provides an overview of insurance, defining it as a system where individuals pay regular amounts to a company that helps cover financial losses in case of unexpected adverse events, such as accidents or damage. It emphasizes the importance of insurance in managing risks and preventing significant financial burdens resulting from such events. Key concepts like 'premium', 'deductible', 'coverage', and 'claim' are introduced, highlighting common types of insurance such as health, car, home, and life insurance. The document discusses how insurance operates by sharing risk among many, where everyone contributes a small amount to a fund that assists individuals facing losses. It also explores the impact of insurance on personal financial management and goals, promoting it as a vital component of a financial safety net.