Insurance is a contract between you (the policyholder), and the insurance company (the insurer) that protects you financially from any damage that your car, health, life, family, or belongings may incur. Insurance offers reimbursement for any financial damage caused with certain terms & conditions applied.
Insurance has 2 types - general insurance and life insurance. General insurance can be further categorised into motor insurance (car and bike), health insurance, education insurance, home insurance, travel insurance, and more.
The purpose of insurance is to reduce financial burden in the time of accidents and/or emergencies. The policyholder pays an amount to the insurance company which is called a premium in exchange for protection at the time of need.
The premium is the amount of money you pay regularly (monthly, annually) to maintain your insurance policy.
Insurance risk is the probability of an insurable event and the possible financial amount of the damages that might occur for which the policyholder will ask for a claim.
