Insurance
From Wikipedia, the free encyclopedia
Insurance is the equitable transfer of the risk of a
loss, from one entity to another in exchange for payment. It is a form of risk
management primarily used to hedge against the risk of a contingent, uncertain
loss.
An insurer, or insurance carrier, is a company selling
the insurance; the insured, or policyholder, is the person or entity buying the
insurance policy. The amount of money to be charged for a certain amount of
insurance coverage is called the premium. Risk management, the practice of
appraising and controlling risk, has evolved as a discrete field of study and
practice.
The transaction involves the insured assuming a
guaranteed and known relatively small loss in the form of payment to the
insurer in exchange for the insurer's promise to compensate (indemnify) the
insured in the case of a financial (personal) loss. The insured receives a
contract, called the insurance policy, which details the conditions and
circumstances under which the insured will be financially compensated.
Courtesy
of http://en.wikipedia.org/wiki/Insurance
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