Finance
What is Insurance?
Insurance is a way to protect yourself from big financial losses by paying a small, regular amount (a premium) to a company that agrees to cover you if something bad happens — like an accident, illness, or theft.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains insurance.
Key things to understand
- 1You pay regular premiums to transfer risk to the insurer.
- 2If a covered event happens, the insurer pays out (a claim).
- 3It pools many people's premiums to cover the unlucky few.
- 4Types: health, life, car, home, travel, and more.
Frequently asked questions
- How does insurance work?
- Many people pay premiums into a pool; the insurer uses it to pay claims for the few who suffer a covered loss.
- What is a premium?
- The regular amount you pay to keep an insurance policy active.
- What is a deductible?
- The amount you pay yourself before the insurer covers the rest of a claim.