Broad objective of this article is to define and discuss on Nature of Insurance. Insurance can be defined as a co-operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to ensure themselves against that risk. Functions of insurance can be divided into two classification: they are Primary Function and Secondary Function. Under the primary here discuss on Insurance Provides Certainty, Risk-Sharing and Insurance Provides Protection. Under secondary functions here explain Prevention of Loss, provides Capital, improves Efficiency and Economic Progress.