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Insurance in a simple form is defined as “ A contract between two parties where one party called the “insurer” undertakes, in exchange for, a fixed sum called premiums, to pay the other party called “insured” a fixed amount of money on the happening of a certain event.”
It is a contract between the person who buys Insurance and the Insurance company who sold the policy. By entering into a contract the Insurance company agrees to pay the Policy holder or his family members a predetermined sum of money in case of any unfortunate event for a predetermined fixed sum payable which is in normal terms is called an Insurance Premium.
Insurance is basically protection against financial loss which can occur on the basis of an unexpected event. Insurance companies collect premiums to in exchange for financial protection. By paying a very small sum of money a person can protect themselves financially.
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Insurance