Insurance provides protection against what?

Insurance serves to protect against possible financial loss that can arise from various risks or uncertainties in life. When you purchase an insurance policy, you're essentially transferring the risk of potential financial impacts from unforeseen events—such as accidents, health issues, natural disasters, or theft—to the insurance company. In the event of a claim, the insurer compensates the policyholder, thereby mitigating the financial burden.

The other choices do not accurately describe what insurance protection entails. Poor credit histories relate to an individual's financial background and do not directly connect to risk protection. High interest rates are primarily a matter of borrowing costs, which can be influenced by credit scores and market conditions but are not something insurance addresses. Insurance fraud, while a concern within the insurance industry, refers to dishonest claims and does not represent a type of risk against which an individual would typically seek protection. Thus, the focus of insurance is firmly on providing financial security against potential losses rather than on these unrelated issues.