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Expert Answer. insurance is a contract in which the insurer agrees to to safeguard or make good the loss to the insured in return of payment of premium . Gene …. Suppose that you are in charge of an insurance company. Two kinds of people want insurance: healthy ople who probably won't get sick this year and unhealthy people who probably will ...

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The fundamental purpose of insurance is to spread out the risk of individual investments among many parties to reduce the risk to any individual member of the pool in the event that an investment fails.

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