Insurance is a co-operative tool to spread the loss occurred due to any kind of unknown risk or unfortunate circumstance to life or any asset of the insured, to the number of persons who are exposed to it & agree to ensure themselves against that risk. In today’s era no one is unexposed to innumerable risks connected with life, business or health. So people are discovering or inventing new plans to overcome the uncertain losses. And insurance provides a good or solid defence against these kinds of losses. Insurance is a very simple mechanism, which can be understood easily without any confusion. Main purpose is to share the risk of insured person with the common group of insured persons. The losses occurred due to happening of certain events cannot be prevented by insurance but can be distributed amongst the agreed persons. Risk is shared by payment of premium, which is calculated on the basis of probability of loss. Insurance can also be termed as social device as it covers large number of persons from the society