A practice by which a company provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. Insurance allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordable rate. We say “significant” because if the potential loss is small, then it doesn’t make sense to pay a premium to protect against the loss. After all, you would not pay a monthly premium to protect against a $50 loss because this would not be considered a financial hardship for most.
From insurance guide, post What is the meaning of insurance
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