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Why do insurance companies exist?

Posted on January 19, 2022 By Blog Admin

Health insurance helps people pay for health care by combining the risk of high health care costs across a large number of people, permitting them (or employers) to pay a premium based on the average cost of medical care for the group. Thus, health insurance makes the cost of health care affordable for most people.

Contents hide
1 Why do we have insurance companies?
2 Why was insurance created?
3 Why would insurance help you?

Why do we have insurance companies?

Health insurance helps people pay for health care by combining the risk of high health care costs across a large number of people, permitting them (or employers) to pay a premium based on the average cost of medical care for the group. Thus, health insurance makes the cost of health care affordable for most people.

Why was insurance created?

Insurance is the oldest method of transferring risk, which was developed to mitigate trade/business risk. Marine insurance is very important for international trade and makes large commercial trade possible.

Why would insurance help you?

Insurance coverage helps consumers recover financially from unexpected events, such as car accidents or the loss of an income-producing adult supporting a family. In exchange for insurance coverage, the insured person is responsible for paying premiums to the insurance company.


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