Insurance Flashcards, test questions and answers

Discover flashcards, test exam answers, and assignments to help you learn more about Insurance and other subjects. Don’t miss the chance to use them for more effective college education. Use our database of questions and answers on Insurance and get quick solutions for your test.

What is Insurance?

Insurance is a form of risk management used to protect individuals and businesses from unexpected financial losses. It can be seen as an agreement between two parties (the insurer and the insured) in which the insurer agrees to pay a certain amount of money on behalf of the insured, in exchange for a predetermined premium payment. Insurance policies are designed to cover potential risks or damages that may otherwise be financially devastating for people or businesses. This includes things like medical bills due to accident or illness, property damage caused by natural disasters, theft, or liability in case someone else is injured on your property.The concept of insurance has been around for centuries; it was first developed by merchants who wanted protection against potential losses due to shipping goods over long distances. Over time, different types of insurance have been developed including health insurance, life insurance, auto insurance and homeowners’ insurance. Each type is designed with specific purposes and covers specific kinds of risks associated with those particular fields. For instance, health insurance typically covers hospitalization costs resulting from accidents or illnesses while life insurance provides benefits upon death in order to provide financial security for survivors. Auto and homeowners’ insurances usually cover damage caused by car accidents and fires respectively while also providing other protections such as legal defense fees if you’re sued over an incident related to either one’s personal vehicle or home. In general terms though, most types of insurances follow similar principles when it comes down to how they operate: premiums are paid regularly in order for coverage levels set forth within the policy can be provided when needed; claims are processed according to what’s stated within individual contracts; third-party companies (such as actuaries) assess risk factors in order determine appropriate premium charges; finally reinsurers come into play when insurers decide they need additional coverage beyond their own resources after major events occur that cause large numbers of claims at once (e.g., hurricanes). Overall, understanding how different types of insurances work can help you make informed decisions about which kind best fits your needs whether it’s protecting yourself from unexpected medical expenses through health care plans or ensuring your loved ones will be taken care off after you pass away with life assurance policies so that you’ll never have face any significant financial hardships due unforeseen circumstances ever again.