The purpose of any insurance is to provide economic protection against the losses that may be incurred due to chance events such as:

1. Death

2. Disability

3. Medical expenses

4. Home or automobile damage, etc.

One party (the insurer), for a set amount of money (premium), agrees to pay the other party (the insured or beneficiary), a sum of money (benefit) upon the occurrence of an event which may or may not occur, during the effective time of the contract, which is called a policy.

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How does insurance satisfy the need for peace of mind? ____________ .

Ans. Insurance provides E P against losses that may be incurred due to chance events that M or occur during the effective time of the contract during the effective time of the contract (called a policy).

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Ans. Insurance provides economic protection against losses that may be incurred due to chance events that may or may not occur during the effective time of the contract (called a policy).

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