Insurance aims to transfer risk and provide financial protection against unexpected events.
Insurance is a financial arrangement that aims to transfer risk from an individual or entity to an insurance company in exchange for a premium. The primary purpose of insurance is to provide financial protection against unexpected events that could cause financial loss.
By purchasing insurance, individuals safeguard their wealth and income from potential risks such as accidents, natural disasters, or health issues. Insurance companies pool risks and offer protection to policyholders, allowing them to mitigate the impact of uncertainty and potentially avoid significant financial losses.
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