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.

Life Insurance
Includes all you need to know about provisions and types of life insurance policies. Learn about incontestable provisions, suicide provisions, reinstatement clauses, excluded risks, and settlement options. Once you speak the lingo, read up on the different types of life insurance: Term life, cash value, whole life, single premium life, universal life, variable life, and variable universal life.

Introduction to Insurance
Find out how to protect yourself by learning the basics behind insurance and what factors should be considered when purchasing insurance.

Health Insurance
Learn about the various kinds of health insurance available, including HMOs, PPOs, FFS plans, and Medicare.  Find information about the advantages and disadvantages of each type of plan to help you decide what plan is best for you.

 Specific Definition of Insurance

1. the act, system, or business of insuring property, life, one’s person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a payment proportionate to the risk involved.
2. coverage by contract in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract.
3. the contract itself, set forth in a written or printed agreement or policy.
4. the amount for which anything is insured.
5. an insurance premium.
6. any means of guaranteeing against loss or harm 

 Insurance or Assurance, device for indemnifying or guaranteeing an individual against loss.

 Reimbursement is made from a fund to which many individuals exposed to the same risk have contributed certain specified amounts, called premiums.

 Payment for an individual loss, divided among many, does not fall heavily upon the actual loser. The essence of the contract of insurance, called a policy, is mutuality.

 The major operations of an insurance company are underwriting, the determination of which risks the insurer can take on; and rate making, the decisions regarding necessary prices for such risks.

 The underwriter is responsible for guarding against adverse selection, wherein there is excessive coverage of high risk candidates in proportion to the coverage of low risk candidates. In preventing adverse selection, the underwriter must consider physical, psychological, and moral hazards in relation to applicants.

 Physical hazards include those dangers which surround the individual or property, jeopardizing the well-being of the insured.

 The amount of the premium is determined by the operation of the law of averages as calculated by actuaries. By investing premium payments in a wide range of revenue-producing projects, insurance companies have become major suppliers of capital, and they rank among the nation’s largest institutional investors.