What is the difference between an insurance policy and a bond?

The difference between an insurance policy and a bond in South Carolina is significant and important to understand. An insurance policy is a contract between an insurer and an insured individual. It outlines the conditions under which the insurer will provide financial protection for losses or damages. Generally, when a person purchases an insurance policy, they pay a premium payment to the insurance company and, in return, the insurer agrees to provide coverage for the losses and damages that are listed in the policy. A bond, on the other hand, is an agreement between a bond issuer and a bond holder, where the bond issuer promises to repay the bond holder at a certain date in the future and with interest. In South Carolina, bonds are often issued by companies, cities, or school districts to raise money for a specific purpose. Unlike an insurance policy, someone who purchases a bond does not receive financial protection for potential losses or damages. In summary, an insurance policy is an agreement between an insurer and an insured individual that results in financial protection for losses and damages. A bond, however, is an agreement between a bond issuer and a bondholder that does not provide financial protection, but instead allows the issuer to borrow money at a fixed rate of interest for a specific purpose.

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What is the difference between an insurance policy and a bond?

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