How insurance can protect against uncertainties in your life and what are the benefit of having insurance or purchase insurance?

Insurance is merely the transfer of risk from one party to another. It works like a co-op in that the risk of one person to have an accident, die, become disabled, etc. cannot be determined. When you take a large number of people, the law of averages allows statistical data to be used and it can be calculated how many people will have something happen in any given year. By this method, premiums can be calculated to spread the risk over a large number of people paying a relatively small premium to cover those that have an incident and allow for claims to be paid.