Insurance is a contract between the insurer and a policyholder/insured, where the insured pays a premium as consideration and the insurer promises to pay a certain amount of money or provide a defined service if an uncertain event covered under the insurance policy occurs during the policy term.
Insurance refers to the risk transfer cum-sharing mechanism, where the risk of an individual is transferred to another, by way of pooling of risks among a group of individuals who are exposed to similar kinds of risk, in exchange for a premium.
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