Teachers are invited to use these materials as a starting point in preparing the life insurance module for their courses in consumer finance, home economics, or life studies. In simple terms this means that a lot of people who think they may suffer a loss all put in a little money to cover financial costs for those among them who actually sustain the loss. Of course, you don't need insurance for everything, only those things that would cause a substantial financial burden on you if you had to replace them on your own.
Insurance works on the concept of risk sharing.
Risk sharing divides risk among many people. For example, all of you run the risk of having your car stolen. However, the past may tell us that only one of your cars will actually be stolen this year. This is basically how insurance works. Historical Perspective .