What is hearsay? What is the policy underlying the hearsay rule? Why are some exceptions made to the hearsay rule?

Hearsay is defined as testimony that is given in court by a witness who relates not what he or she knows personally but what another person said. Literally, it is what someone heard someone else say. Hearsay is generally not admissible in court when offered to prove the truth of the matter asserted.
There are several reasons why hearsay is generally not admissible. First, the person who made the out-of-court statements (referred to as the declarant) was not under oath at the time of making the statements. Second, the witness who is testifying may have misunderstood what the other person said. Third, because there is no opportunity to cross-examine the person who actually made the statements, there is no way to verify that the statements were actually made, much less that the witness heard them correctly. In other words, hearsay evidence is inadmissible because it is unreliable, not because it is irrelevant.
Exceptions to the hearsay rule are made in specific circumstances, often because the statements are made in situations that indicate a high degree of reliability.