What does insurance primarily provide to individuals or entities?

Insurance primarily provides protection against possible financial loss. This assurance allows individuals and entities to mitigate the financial impact of unforeseen events such as accidents, illnesses, property damage, or liability claims. By paying a premium, policyholders transfer the risk of substantial financial losses to the insurance company, which helps them maintain financial stability in the face of these potential losses.

When an insured event occurs, such as an accident or damage to property, the insurance policy will cover the associated costs, up to the limits defined in the policy. This financial safety net offers peace of mind, allowing individuals and businesses to pursue their activities without the constant fear of significant financial setback due to unexpected events.

While access to medical care, investment opportunities, and potential legal protection may be beneficial aspects of certain insurance products or associated services, they do not capture the primary function of insurance as thoroughly as protecting against financial losses.