The best description I&#x27;ve seen is that insurance is peace of mind.<p>from an individual perspective, insurance means you don&#x27;t have to worry about unexpected expenses from things beyond your control (ie, peace of mind).<p>Now, the mechanism by which this is achieved may be described as a pool in that it&#x27;s a single company with a pool of money that everyone pays into and the input into that pool necessarily must be greater than the output.<p>But from the &quot;customers&quot; perspective, insurance is peace of mind.  ie, it smooths their total risk over time.