Insurance is a financial product sold by insurance companies to safeguard you and / or your property against the risk of loss, damage or theft (such as flooding, burglary or an accident).
When you buy a policy you make regular payments, known as premiums, to the insurer. If you make a claim your insurer will pay out for the loss that is covered under the policy.
If you don’t make a claim, you won’t get your money back; instead it is pooled with the premiums of other policyholders who have taken out insurance with the same insurance company. If you make a claim the money comes from the pool of policyholders’ premiums.
You can buy insurance policies for many aspects of your life and business, for example health, property, car, employees or retirement.
The insurance policy is the contract that you take out with an insurer to protect you against specific risks under agreed terms.