Most people have some kind of insurance: for their car, their house, or even their life. Yet most of us do not stop to think too much about what insurance is or how it works.
Put simply, insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured.
Insurance policies are used to hedge against the risk of financial losses, both big and small, that may result from damage to the insured or their property, or from liability for damage or injury caused to a third party.
There are many types of insurance policies. Life, Health, Domestic Packages, Personal Accident Covers, and Motor vehicle are the most common forms of insurance.