A policy or agreement between the policyholder and the insurer which is considered only after realization of the premium.
The premium is paid by the insurer who has a financial interest in the asset covered.
The insurer will protect the insured from the financial liability in case of loss.

Insurance is a concept that applies to a large group of people which may suffer the same risk in the same conditions or region. The money collected as the premium can be called as a pool and when anyone faces a loss, the person is paid from that pool.

Theory of probability: Lets see this example.

Let us assume that a particular city has a population of 1 lakh.

In the city, on an average in a year,
200 people die in accident,
800 people get injured and disabled,
2000 die natural death, &
7000 die of disease.
All Totalling to 10000

This data as per statistic is certain.

Then what is uncertain?

Uncertainty is as to who will die or get disabled during day-to-day high-risk prone fast life. Though the number of deaths, accidents etc. is known,

What is not known is the name, age, time, place and of the ‘PERSONS’.

If it is known that 200 persons are prone to accidental death in a year, it is not known which 200 individuals?

Due to this certainty, that 10000 people will die in an accident, or get injured and disabled or die natural death or die of disease; all 1 lakh people will fear
a. accident,
b. possibility of injury or death and its consequences to varying degree as per their age,

behavior, nature of work, environment hazards and many other factors.
Grown ups and breadwinners may fear more and dependents may fear less.

If in a city of 1 lakh houses & shops, there are about 1000 thefts every year, though some particular 1000 people are affected by the theft, all others (may be more than 90,000) will fear theft, and will like some solution to this problem.

This method of sharing losses of a few by many is the basis or core philosophy of insurance.

Once we’ve understood what General Insurance is, let us understand how and when will the policy apply.

Car insurance
In today’s world, a car insurance is an important policy for every car owner. This insurance protects you against any untoward incident like accidents. Some policies also compensate for damages to your car during natural calamities like floods or earthquakes. It also covers third-party liability where you have to pay damages to other vehicle owners.

Education Insurance
The child education insurance is akin to a life insurance policy which has been specially designed as a saving tool. An education insurance can be a great way to provide a lump sum amount of money when your child reaches the age for higher education and gains entry into college (18 years and above). This fund can then be used to pay for your child’s higher education expenses. Under this insurance, the child is the life assured or the recipient of the funds, while the parent/legal guardian is the owner of the policy.

Home insurance
We all dreaming of owning our own homes. Home insurance can help with covering loss or damage caused to your home due to accidents like fire and other natural calamities or perils. Home insurance covers other instances like lightning, earthquakes etc.

Apart from the safety and security benefits of buying insurance, there are also the income tax benefits that you can avail.

Life insurance premium of up to ₹1.5 lakh can be claimed as a tax-saving deduction under Section 80C
Medical insurance premium of up to ₹25,000 for yourself and your family and ₹25,000 for your parents can be claimed as a tax-saving deduction under Section 80D

These claims have to be made at the time of e-filing income tax returns.