Insurance

Life can be a risky business. Every day you and members of your family face the possibility of a financial loss. A car may be damaged in an accident, or it may cause injury to people; a home and all its contents could be destroyed by the fire or a flood. Personal possessions may be stolen. Income may be lost as a result of an injury, disability or death.

People protect themselves form such situations by taking out insurance. This means paying an annual or monthly amount to an insurance company in return for the company’s guarantee to pay for certain damages or losses.

Insurance is simply a system of protection that works by spreading risk. Instead of one person taking all the risk, an individual  pays other people to share some of the risk. When people purchase any type of insurance, they pay a premium (a sum of money) to an insurance company to protect them against a possible future loss.