Meaning and Definition of Insurance

Insurance is the legal contract that protects people from the financial costs. Financial costs may result from loss of lifetime, loss of condition and property damage. People purchase contracts of insurance, called policies, from insurance companies. Insurance provides a means to cope with some of the risks faced by men in their everyday life. For instance laws in most countries require people who own a car to buy insurance before driving it on public roads. There is no unanimous definition of insurance. People in various discipline may define insurance in various ways. Insurance is a legal contract between insurer and insured. The insurer assures the insured in case of losses. Insurance compensates these losses.