🛡️ Simple Definition:
Insurance is a way to manage risk. If something bad happens—like an accident, illness, theft, or natural disaster—the insurance company helps cover the costs.
🔄 How Insurance Works:
- You buy a policy (a legal contract).
- You pay premiums (monthly, quarterly, or annually).
- If a covered event happens (e.g. car accident, fire, or hospitalization), you file a claim.
- The insurance company pays out compensation according to the policy terms.
🏷️ Common Types of Insurance:
| Type | What It Covers |
|---|---|
| Life Insurance | Pays money to your family if you die. |
| Health Insurance | Covers medical bills, hospital stays, treatments. |
| Car Insurance | Covers damage to your vehicle or others in case of an accident. |
| Home Insurance | Protects your house and belongings from fire, theft, disaster. |
| Travel Insurance | Covers trip cancellations, lost baggage, medical emergencies. |
| Business Insurance | Protects companies from losses due to lawsuits, fire, etc. |
đź’ˇ Why Insurance Is Important:
- âś… Provides financial protection in emergencies
- âś… Offers peace of mind
- âś… Required by law in some cases (e.g. car insurance)
- âś… Helps with long-term planning (e.g. life and health insurance)
🧠In Summary:
Insurance = Paying a little to protect a lot.
It’s a tool for managing risk, so you don’t have to bear the full cost of unexpected events alone.