Insurance is a contract in which an entity or individual receives financial protection or reimbursement in the event of a loss from an insurance company.

Insurance is designed to protect the financial well-being of an individual, company, or other entity in the case of unexpected loss. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for premiums, the insurer agrees to pay the policyholder a sum of money upon the occurrence of a specific event.

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