What is Insurance

To know what is insurance, we need to know what is risk.   Risk is actually the standard deviation from the expected returns.  For example, if you invest $100 and you expected and get $100 there is totally no risk.   But if you invest $100 and you expect to get between $10-1000 then it is a very big risk.   For us we do not like risk, you won't want your $10 to belong $1 or $100 the next time and keep changing?   Therefore insurance comes in.

An Old Insurance Contract from Public Domain

Insurance is actually to manage your risk, be it your health, property and nowadays almost anything.   There are even derivatives of insurance and exotic futures tied to insurance.   It is a very complicated but interesting field to explore.   I open this blog to learn more about insurance and hope that you can learn with me.