ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A financial product (called an insurance contract or policy) purchased by many people facing a similar risk to protect against the risk of larger losses. Provides payment to the insured person if his or her property is damaged or destroyed by an accident covered by the insurance policy.

Detailed explanation-2: -Risk transfer. Typically this involves buying an insurance policy to cover the financial costs of the potential harm.

Detailed explanation-3: -When you buy insurance, you purchase protection against unexpected financial losses. The insurance company pays you or someone you choose if something bad happens to you. If you have no insurance and an accident happens, you may be responsible for all related costs.

Detailed explanation-4: -Deductible. A certain dollar amount specified in some insurance policies beyond which insurance protection begins. The insured assumes the loss up to the limit of the deductible amount, then the company pays over that amount.