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Insurance is a contract that provides comepensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy and the periodic payment is known as the insurance premium. Insurance provides a mechanism for shifting risk from a person, business, or organization to an insurance company in exchange for the payment of the insurance premium.
There are many types of insurance and our guide provides information about the most common types. The most important ones for most individuals are health insurance, life insurance, and auto insurance. Health insurance provides protection against sickness and bodily injury. Auto insurance provides can pay for injuries or damange resulting from an auto accident or when an auto is vandalized or stolen. Life insurance makes a payment to your beneficiaries in the event of your death.
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