Your Guide to Personal Financial Freedom: Finance Glide
Insurance is an idea that is as old as humanity. The concept has remained mostly unchanged over time, which is amazing considering how many things have changed, from the first caveman who had his club broken by a wild boar to the present day when we depend on insurance plans to keep us from having to go around in fear.
An individual or institution receives financial protection or payment against losses through an insurance contract (policy) from an insurance firm.
In order to make payments to the insured more manageable, the corporation pools the risks of many different people. If you want to purchase insurance for your home and vehicle, for instance, you might choose for a policy that covers both at once and only pays out when one event occurs (as opposed to having different policies). As part of this risk pooling, you must also determine the kind of damage you are willing to accept. For example, will your insurance cover damage to a car that is parked in front of your home?