Insurance is a contract between two parties, one being the insured who will pay a premium to the second party known as the insurer who will pay compensation in a specified loss losses, for instance, fire or theft. Insurance provides an opportunity to share specified risks. Insurance has two traditional kinds:
(a) General insurance
(b) Life assurance
With life the word assurance is used because the occurrence of death is inescapable.
Insurance is commonly provided against retirement, unemployment, sickness. Other areas covered under insurance are:
Private medical insurance
The public does not deal directly with the underwriter (the insurer) and gets insurance policy through an insurance agent or broker who works for a commission which is paid by the insurance company.