Insurance is just the word used by companies when they sell a person a policy to protect them against financial loss. Financial losses take many forms, there can be a risk to our investments, liabilities for our actions and risks for our ability to earn an income. When we speak of insurance we speak of the insurer which is the company that provides the insurance and the insurer that is the recipient of the coverage. There are mainly two types of insurance life insurance and non-life. Life insurance rates policies either pay at a defined amount at the time of death or some may pay at maturity while others work almost as a savings account till maturity. In this article I would like to highlight some of the principles of insurance.

First, there are some policies that fall under the category of definite loss. This is when a loss happens at a definite time, in a definite place, from a definite cause such in the case of a death.

Second, there is unintentional or accidental loss, this is an incident that happens that is out of the control of the insured and not beneficial to them.

Third, there is huge loss insurance, in this case the size of the loss must be meaningful from the perspective of the insured. The insurance premiums need to cover both the expected cost of losses, plus the cost issuing and administering the policy. adjusting the loses,and supplying the capital needed to assure that the insurer will be able to pay the claims.

Lastly. affordable premium insurance this is if the probability of an event is so high or the cost of the event is so large making the cost of the premium so high that no one is likely to buy the insurance or even offer the insurance.

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