Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed small loss to prevent a large, possibly devastating loss. Insurance covers
- Loan cover: if someone has taken an education loan, it covers the guarantor of the loan if the person who took loan dies before complete repayment
- Education corpus: saving money for higher education of children
- Retirement corpus: saving money for life after retirement
- Wedding corpus: accumulating wealth for children’s marriage insurance.