Insurance refers to an agreement in which an organization or a state promises to compensate an individual or entity for a particular loss, damage, illness, or death in exchange for a monthly premium paid by the individual.

There are four main types of insurance policies:

• Life insurance: aims to financially secure the policyholder’s family after their death.

• Health insurance: provides monetary aid to the policyholder or their family for serious health-related issues.

• Property insurance: covers damages caused to the policyholder’s property by fire or any other means.

• Auto insurance: provides financial aid to repair damages or stolen vehicles.

It is important to know the benefits of insurance before purchasing any policy. Insurance can benefit individuals and organizations in various ways:

• Insurance provides security and reduces the losses of an individual or entity. It is a contract that helps minimize the financial losses faced by the policyholder.

• Insurance manages cash flow uncertainty by providing compensation for covered losses, avoiding out-of-pocket expenses.

• Insurance complies with legal requirements by meeting contractual requirements and providing legal evidence of refund or losses, which is required by the law.

• Insurance promotes risk control activity by offering incentives to implement a loss control program.

• Insurance assists in obtaining credit as it provides a guarantee that the lender will receive full compensation if the loan amount or property is destroyed.

• Insurance collects premiums from policyholders and invests them in various schemes, providing a source of investment funds that are accessed when claims occur.

• Insurance helps reduce the social burden of victims by giving them compensation.