Insurance is a financial arrangement that provides protection against various types of risks or potential losses. It involves the transfer of risk from an individual or entity (the insured) to an insurance company (the insurer) in exchange for payment of a premium. Insurance helps individuals and businesses manage the financial impact of unexpected events by providing compensation or coverage in case of specified circumstances.

Key concepts and types of insurance include:

  1. Premium:  The amount of money the insured pays to the insurance company to purchase coverage. Premiums can be paid on a regular basis (monthly, annually, etc.).
  2. Policy:  The formal written contract between the insured and the insurer. It outlines the terms, conditions, coverage limits, and exclusions of the insurance arrangement.
  3. Insured:  The individual, property, or entity that is covered by the insurance policy.
  4. Insurer:  The insurance company that provides coverage and agrees to pay out claims in case of covered events.
  5. Coverage:  The scope of protection provided by the insurance policy. Different policies cover different risks