A contract of Insurance is a type of Contingent contract and have validity in Law. Besides a contingent contract, Insurance contract is totally different from wagering agreement though it may resemble it the most. Insurance contract is a blend of Contract of Indemnity & Contract of contingency. The confusion between contract of insurance and a wagering agreement is simplified below:
The crux of insurance contract is mutual consideration....being one of the most essential part of a valid contract...that is to indemnify the insured person against the loss he may encounter in future....an uncertain but possible event....in consideration for the premium he pays to the company.
In contrast to this in wagering agreement there is no consideration between the two parties,it is just gambling for money. That's why betting is illegal just for the lack of real life consideration.
So it is invalid to say or bet that if it will rain tomorrow, I will pay you $100, or if it is otherwise, then you will pay me $100. You see there is no real life consideration and it is not a valid contract totally different from the contract of insurance where one will have to make one's good financially if there is some gruesome financial situation respective to one's own insurance policy.

In the above example of gambling, someone must say that there is a consideration of $100, how can it be termed being inconsiderable agreement? But the fact is that there is no business involved! Contracts and agreements are based on day to day business and there is no way to say that if it rains, then I will pay for nothing.....just pay for no consideration....or if it doesn't ,then will be paid.....just paid...for no consideration.

In contract of Insurance there is an insurable interest of the insured in the life or property sought to be insured and in wagering agreements there is no property at all,it's just betting on other's life and properties. The subject matter of the contract is absent in wagering agreements ,so they are void ab intio.
As mentioned above,Insurance contract is based on two principles:
1)Contingency
2)Indemnity

Contingency is in terms of executing it when some unfortunate future event take place and indemnity in the sense that to indemnify,to make good the loss resulted from the event occured, the person who is insured against such losses in consideration for the annual premium that he pays. When it is juxtaposed with wagering agreements, there is contingency without any subject matter or consideration but doesn't at all involve any sort of indemnity or risk relief.

Essence of the risk in Insurance Contract & Wagering Agreement:
In legal businesses and valid contracts, the risk is taken hoping in financial success to achieve. So risk is for that purpose simplified by scientifically calculating and providing for the necessary consideration and events where great mathematics and statistics is involved. If the risk is more than 50 percent secure than enterprenures may wish to do or contract their business' operations , if it is below 50 or fifty fifty, no one will go for.
I meant that in wagering agreements either you win or lose.....there is fifty percent chance of winning and fifty percent chance of losing...so if still one is going for that , it means that he is gambling. There is fifty percent hope and fifty percent desperation.