Final answer:
The purchase of health or life insurance is primarily done to limit one's financial loss in case of illness, injury, or death by paying regular premiums for risk pooling and compensation.
Step-by-step explanation:
The reason that a person buys health or life insurance is to limit the amount of financial loss if there is an illness or injury. Insurance is a method that households and businesses use to prevent a single event from causing significant financial harm. People pay regular premiums to an insurance company, which pools the risk among many policyholders. When a person encounters a specified loss, such as illness, injury, or death, they receive compensation from this pool of money, effectively managing and limiting their financial risk.
Health or life insurance is purchased to limit the amount of financial loss if there is an illness or injury. By having health insurance, an individual can receive medical care without having to pay the full cost out of pocket. Life insurance, on the other hand, provides financial support to the insured person's family in the event of their death.