We've all seen numerous ads on insurance. Also I am pretty sure you have relatives or friends who are insurance agents who have tried to sell you a policy. But do we understand what insurance is? 

In simple words, insurance is a protective armour. It shields you financially from shocks that affect your wallet after an unexpected event. This event can be anything: the death of a family member (possibly the breadwinner), an accident or surgery, damage to one’s home or vehicle, and so on. 

An insurance is basically a contract (aka a policy), where the insured person or party receives financial protection or reimbursement from the insurance company in case of certain kinds of losses.