Insurance

Insurance operates on a simple principle: risk sharing.

Individuals or businesses pay a fixed amount (premium) to an insurance company. In return, the insurer provides financial compensation in case of covered losses. By pooling risk across many policyholders, insurers make protection affordable and accessible.

Premium: The premium is the cost of the insurance policy, usually paid monthly or annually. It is determined based on risk factors such as age, health, assets, or business profile.

Policy Limit: This is the maximum amount an insurer will pay for a covered claim. Higher coverage limits typically result in higher premiums.

Deductible: The deductible is the amount the policyholder must pay before the insurer covers the remaining claim. Policies with higher deductibles usually have lower premiums.