If the Dealer’s up-card is an Ace, there’s a chance that they’ll have Blackjack (Ace and a 10-ranking card) and therefore have a guaranteed win. Before they peek to check for this, you have a chance to insure your hand for a second bet that’s half the size of your initial bet.
If the Dealer has Blackjack, your side bet will pay 2:1, which means that despite losing to the Dealer you’ll still break-even.
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