What is Insurance? Definition and Meaning of Insurance
Insurance is a type of contract that is being done between a policyholder and the policy company or say insurance company. Under this contract, the insurance company holds some percent of policyholders loss, if it meets the terms and conditions that was signed at the time of getting that policy.
The policyholder files a request for compensation with the insurance company. The insurance company will pay some amount of the loss along with the policyholder.
Meaning of Insurance:
Let’s find about each of them in brief
The definition of insurance according to businessdictionary.com
Risk-transfer mechanism that ensures full or partial financial compensation for the loss or damage caused by the event(s) beyond the control of the insured party. Under an insurance contract, a party (the insurer) indemnifies the other party (the insured) against a specified amount of loss, occurring from specified eventualities within a specified period, provided a fee called premium is paid. In general insurance, compensation is normally proportionate to the loss incurred, whereas in life insurance usually a fixed sum is paid. Some types of insurance (such as product liability insurance) are an essential component of risk management, and are mandatory in several countries.