Which term defines the process of transferring risk through an insurance policy?

The term that defines the process of transferring risk through an insurance policy is transfer. This concept refers to the act of shifting the financial burden of a potential loss from an individual or business to an insurance company. When a person or entity purchases an insurance policy, they essentially pay a premium in exchange for the assurance that the insurer will cover certain losses or damages that may arise. This process is fundamental to the functioning of insurance, as it allows individuals and businesses to protect themselves against unpredictable and potentially devastating financial impacts of various risks. By transferring risk, policyholders can gain peace of mind, knowing they have a safety net in place should adverse events occur.