by Bob Reeves
The principle of insurance is quite simple. You pay relatively small amount of money up front (a premium) so that you can claim a larger amount of money later if something goes wrong. You can insure almost anything but typically it will be your car, house, possessions, health, pets or yourself.
Insurance is all about probability and risk. If you are a healthy 25 year old with no adverse medical history you will get very cheap travel insurance because the chances of you making a claim are quite small. If you are 85 you might not even find an insurance company willing to insure you.
Premiums are calculated based on the chances of you claiming. With driving for example, you will get cheaper car insurance is you have not claimed for several years. This is because you have proved you are a safe driver. Life insurance gets more expensive as you get older, as quite frankly the older you get the closer you are to death!
Some insurance is compulsory. For example, third party car insurance. In most other cases, you can take insurance if you think it is worth it. This is really a matter of personal judgement and attitude to risk.
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