How is an "insurance policy" defined?

An insurance policy is defined as a contract specifying coverage details between the insurer and the insured. This definition encapsulates the essence of an insurance policy, which is fundamentally an agreement that outlines the terms under which the insurer will provide financial protection to the insured. It contains specific information about the nature of coverage, the events or risks that are insured, the limits of the coverage, the premiums to be paid, and any conditions or exclusions that apply.

This contractual nature is crucial as it sets the legal framework governing the relationship between the parties involved. The insured has a clear understanding of what is covered and under what circumstances, while the insurer delineates the scope of its liability.

Other options do not fully capture the comprehensive nature of an insurance policy. While one option mentions rights, it is very limited as it only considers the rights of policyholders. Another suggests a summary of risks, which ignores the contractual obligations and specifics that are crucial to the policy. The last option addresses financial assessments, which are indeed important in evaluating an insurer but do not pertain to the definitional aspect of an insurance policy itself.