Insurance is a contract between an insurer and a policyholder that provides protection against financial losses from specific contingencies or perils 1. The policyholder pays a premium to the insurer, who agrees to pay a set amount of money if a covered event happens 1. Insurance can help with risks from unexpected events, such as accidents, fire, sickness, or death, as well as with routine costs, such as medical and dental visits 1. The insured entity may be the policyholder or someone they choose 1.