Insurance is the process of transferring the risk of a large financial loss to a company willing to pay for the loss in exchange for a small guaranteed payment. (pocketsense.com)
A formal device for reducing the chance of loss by transferring the risks of several individual entities to insurance companies. (rmiia.org)
However, in exchange for transferring the risk back to the insurer these policies typically have a higher premium and build little cash value. (investopedia.com)