Insurance is the risk sharing between the policyholder and the company. An individual faces various risks, whether about his health or his property. Insurance reduces the risk of the financial burden the individual might face in the situation of some mishappening.

What is meant by insurance in simple words?

Insurance in simple words, is a pact between an insurance company and an individual or entity (the policyholder) in exchange for small fees (premiums). In turn, the insurance company safeguards the policyholder against financial loss, damage, or injury under certain circumstances. Under the insurance policy market, the insurance company is known as an insurer, and the individual or entity is known as an insured.

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