Captive insurance

Captive insurance is like having your very own insurance company! Let's say you have a lot of things you want to insure against - like your house, your car, and your business. You could go to a big insurance company and buy insurance from them. But sometimes, those big insurance companies charge a lot of money for the coverage you want.

So, instead, you could create your very own insurance company - this is the "captive" part. You would be the owner of this company, and you could decide what things you want to insure against and how much you want to charge people for that insurance.

Now, you might be thinking, "How can I afford to start my own insurance company?" Well, you don't have to do it alone. You could team up with other people or businesses that also want to insure against similar things, and together you could all pool your money to start the company.

Once you have your own insurance company, you can use it to buy insurance for yourself and your business. And if you have extra money left over after paying out any claims, you can keep that money in the company as savings, which can help reduce the cost of insurance for you and your co-owners in the long run.

So, captive insurance is like forming your own little insurance club with your friends and using that club to buy insurance for yourselves.