Life Insurance
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INSURANCE : Definitions
A
promise
of compensation for specific
potential
future
losses in
exchange
for a
periodic
payment
. Insurance is designed to
protect
the
financial
well-being of an
individual
,
company
or other
entity
in the case of unexpected
loss
. Some
forms
of insurance are
required
by
law
, while others are
optional
. Agreeing to the
terms
of an
insurance policy
creates
a
contract
between the
insured
and the
insurer
. In exchange for payments from the insured (called premiums), the insurer
agrees
to
pay
the
policy
holder
a
sum
of
money
upon the occurrence of a specific
event
. In most cases, the policy holder pays part of the loss (called the
deductible
), and the insurer pays the rest. Examples include car insurance,
health insurance
,
disability insurance
,
life insurance
, and
business insurance
.