An insurance policy is a contract between an individual and an insurance company that provides financial protection against specific risks. The policy outlines the terms, coverage limits, and conditions under which the insurer will pay for losses or damages. Common types of insurance policies include health insurance, auto insurance, and homeowners insurance. When a policyholder pays a premium, they gain access to the benefits outlined in the policy. In the event of a covered incident, the policyholder can file a claim to receive compensation or assistance. Understanding the details of an insurance policy is essential for effective risk management.