Definition of Insurance

According to Henry James, Jr., “Insurance – an ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.”

According to Elbert Hubbard, “Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.”

Insurance : Meaning, Definitions and Functions

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What is Insurance?

Insurance is a legal contract (insurance policy) agreed upon between the two parties, namely the insurance firm (also known as the insurer) and the individual or group (known as insured). It is a method that spreads the loss likely to be caused by an unknown occurrence among a number of people who are exposed to it and plan to protect themselves against it. The parties of insurance enter into a contract in which the insured pays the insurer a predetermined sum of money (known as a premium) with the promise that the company will compensate the insured in the occurrence of a financial loss (risk) due to the causes for which the insurer has agreed to provide coverage. Insurance serves several functions that contribute to individuals’ and businesses’ financial security and stability....

Definition of Insurance

According to Henry James, Jr., “Insurance – an ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.” According to Elbert Hubbard, “Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.”...

Functions of Insurance

The functions of Insurance are as follows:...