insurance
Definition
A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest. Examples include car insurance, health insurance, disability insurance, life insurance, and business insurance.
Use insurance in a sentence
“ My car insurance premium increased because of the accident that happened at an intersection on the other side of town last month. ”
“ Our company takes pride in providing our employees with a wide variety of wonderful and affordable insurance policies to ensure they are taken care of in their times of need. ”
“ After my company lost its entire factory when the building burned down, we were able to build a new building and keep the company going because we received a large insurance payment. ”
Related Terms
Mentioned in these terms
- directors and officers liability insurance
- Associate in Marine Insurance Management (AMIM)
- life insurance trust
- bridge insurance for bridges under construction
- endowment insurance
- credit card insurance
- professional liability insurance
- bank-owned life insurance (BOLI)
- insurance company
- estimated hazard insurance
