The business of insurance is one of sharing. It spreads losses of an individual over the group of individuals who are exposed to similar risks. People who suffer loss get relief because at least part of their loss is made good. People who do not suffer loss are relieved because they were spared the loss.
Insurance companies are called insures. The business of insurance is to
a. Bring together persons with common insurance interests ( sharing the same risks ) ,
b. Collect the share or contribution (called premium )from all of them , and
c. Pay out compensations (called claims) to those who suffer from the risks.
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