Loading your learn pack…
Read the summary, then start training!
Insurance transfers the financial impact of certain uncertain events from the policyholder to the insurer in exchange for a premium.
Insurance is a risk-management arrangement in which one party (the insurer) agrees, for a fee (the premium), to compensate another party (the insured) if a specified loss, damage, or injury occurs. The insured receives a contract called an insurance policy that sets the conditions under which compensation will be paid, and the insured must have an insurable interest in what is being protected. Losses covered by insurance must be reducible to financial terms, even if the event itself is not purely financial.
Insurance transfers the financial impact of certain uncertain events from the policyholder to the insurer in exchange for a premium.
The insurance policy defines covered events and the insurer’s obligation to pay, while the premium is the amount charged for that coverage.
Insurance relies on risk pooling: many insured entities contribute funds so that losses incurred by some can be paid from the pooled resources.
A means of protection from financial loss where, for a premium, an insurer compensates the insured if a covered loss occurs.
An entity that provides insurance and promises compensation under the terms of the policy.
The person or entity that buys the insurance policy and pays the premium.
The person or entity covered under the policy who may receive compensation for a covered loss.
The contract that specifies the conditions and circumstances under which the insurer will compensate the insured.
The fee charged by the insurer to the policyholder for the coverage provided by the policy.
A requirement that the insured has a stake in the loss or damage to the insured property or person.
The process of pooling funds from many insured entities to pay for losses that some may incur.
“Can you explain what "Insurance transfers the financial impact of certain uncertain events from the policyholder to the insurer in exchange for a premium." means in simple terms?”