ECONOMICS

Detailed explanation-1: -The official definition of insurance is a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.

Detailed explanation-2: -Indemnity is a contractual agreement between two parties. In this arrangement, one party agrees to pay for potential losses or damages caused by another party.

Detailed explanation-3: -Disability insurance is a promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financially well-being of an individual, company or other entity in the case of unexpected loss.

Detailed explanation-4: -If you pay for items that are consumed immediately or wear out quickly by placing them on your credit card, what is happening to your wealth? You’re becoming poor.