Insurance essentially is a common pool into which people put money [quantity of money you put in decides how much you can withdraw] without knowing which ones of them will need [a lot more] money later in life. Only a few out of the total group feel the need for money later in life, and these folks get many times more money than they had put in [because they also take those people's money who never needed to access this pool but had put in money].
It's like everyone says that we don't know who among us is going to require lots of money [due to a car accident or a critical illness or maybe death], so let us all put in small amounts to create a big pool and the few who will genuinely require money will each get a large sum.
In this sense the whole concept of insurance policies rests on a very socialism-like system. Even though banking, insurance, mutual funds, etc., are all hallmarks of a capitalist society. So socialism [and maybe communism] very much thrives even today, although as threads within the fabric of an otherwise capitalist society.
It's like everyone says that we don't know who among us is going to require lots of money [due to a car accident or a critical illness or maybe death], so let us all put in small amounts to create a big pool and the few who will genuinely require money will each get a large sum.
In this sense the whole concept of insurance policies rests on a very socialism-like system. Even though banking, insurance, mutual funds, etc., are all hallmarks of a capitalist society. So socialism [and maybe communism] very much thrives even today, although as threads within the fabric of an otherwise capitalist society.
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