Insurance is necessary because of the need to meet uncertainties in the future. It provides a mechanism for individuals and businesses to transfer the risks of potential financial loss to an insurance company, which pools resources from many policyholders to pay for losses that may occur. By paying a relatively small premium, individuals and businesses can protect themselves against the financial impact of unexpected events such as accidents, natural disasters, or illnesses. In this way, insurance helps to promote financial stability and peace of mind. It is not designed to make a profit or lend money to individuals.