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Insurance is system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance policy helps in not only mitigating risks but also provides a financial cushion against adverse financial burdens suffered.
Insurance policies cover the risk of life as well as other assets and valuables such as home, automobiles, jewelry et al. On the basis of the risk they cover, insurance policies can be classified into two categories:
1. Life Insurance Policies
2. General Insurance Policies
3. Insurance Companies
