Skip to main content

IMPORTANCE OF HAVING INSURANCE

Human beings, his family and properties are always exposed to different kinds of risks. Risk involve the losses. Insurance is a tool which reduces the cost of loss or effect of loss caused by variety of risk. It accumulates funds to meet individual losses. It is not device to prevent unwanted event of happening or cause of loss but protects them against that loss by compensating which as lost. The role and importance of insurance are discussed as follows:
auto Insurance

1. Insurance provides security

Insurance provides safety and security against the loss on a particular event. Life insurance provides security against death and old age sufferings. Fire insurance protects against loss due to fire while Marine insurance provides protection and safety against loss of ship and cargo. For personal accident and sickness insurance financial protection is given when the individual is unable to earn. In other insurance too, this security is provided against the loss at a given contingency.

2. Insurance reduces business risk or losses

In Business, commerce and industry, huge properties are employed. Because of slight negligence, the property may be turned in to ashes. A person may not be sure of his life, health and cannot continue the business up to the longer period to support his dependents. By the help of insurance, he can be sure of his earning, because the insurance company will pay a fixed amount at the time of death, damage by fire, theft, accident and other perils.

3. Insurance provides peace of mind

Insurance removes the tensions, fears, anxiety, frustrate or weaken of the human mind associated with the future uncertainty. By providing financial position and promise to compensate losses arise out from various risk, it provides peace of mind and stimulates more and better work performance of an individual.

4. Life insurance encourages saving

The insured has an obligation to pay premium regularly and cannot be withdrawn easily before the expiry of the term of policy. Life insurance encourages the habit of regular and systematic saving through premium and after a certain period, it would be a part of necessary saving of the insured person.

5. Insurance accelerates the economic growth of the country

To develop the economic growth of the country, insurance provides strong hand and mind, with protection against loss of property and capital to produce more wealth. It provides protection against different kinds of loss caused by risk. It accumulates the capital from the insured and utilizes for the development of country. Thus, the insurance meets all the requirements for the economic growth of a country.

6. Insurance provides credit facilities

The insured person can get loan by pledging insurance policy and the interest will not exceed the cash value of policy charged by insurer. In case of death of insured person, the policy can be utilized for setting of the loan with interest. Business person can take loan on the basis of insurance documents from the bank also.

7. Insurance helps to reduce inflation

Inflation created from over supply of money and on less production entities. Insurance can help to reduce the inflationary pressure in two ways. Firstly, it collects money as an amount of premium which controls over supply of money and secondly, it provides sufficient funds for increase production entities. Thus, it reduces the impact of inflation.

8. Insurance makes security and welfare of employees

The security and welfare of employees is the responsibility of employer. These security and welfare are easily met by life insurance, accident and sickness benefit and pension which are generally provided by group insurance. The premium for group insurance is normally paid by the employer. Insurance is the simple method for employer to fulfill their responsibility. Due to these benefits, employee will devote their maximum capacities to complete their job.

9. Other Importances of Insurance

a) Insurance helps to promote foreign trade providing protection again trade risk.
b) Insurance increases business efficiency eliminating the loss of damage, destruction, or disappearance of property of goods.
c) Insurance protects the social wealth providing protection against social evil.
d) Development of insurance business helps to solve the evil of unemployment, generating employment opportunity in the country.
e) The insured gets tax benefit in life insurance.

 Read More: Principles of Insurance
Labels:

Comments

Post a Comment

we love to hear from you

Popular posts from this blog

Top 10 Best Night Club in Nigeria

Nightclubs (or Disco as known in most European countries) is an entertainment event center and bar that usually operates late into the night. A nightclub is generally distinguished from regular bars, pubs or taverns by the inclusion of a stage for live music, one or more dance floor areas and a DJ booth, where a DJ plays recorded music and also the closing hours. The upmarket nature of nightclubs can be seen in the inclusion of VIP areas in some nightclubs, for celebrities and their guests. Nightclubs are much more likely to use bouncers to screen prospective clubgoers for entry. Some nightclub bouncers do not admit people with ripped jeans or other informal clothing or gang apparel as part of a dress code. The busiest nights for a nightclub are Friday and Saturday night. Most clubs or club nights cater to certain music genres, such as house music or hip hop. Below are the list of the luxurious and most expensive Night Clubs in Nigeria 10. Signatures – Akure The c...
Post a Comment
Read more

Man Cries Out as He is Sentenced to Jail for fetching Rain Water

Gary Harrington of Eagle Point, has been sentenced to 30 days in jail and to pay a fine of $1,500, all because he had three reservoirs on his own property, that he used to collect and use rainwater. Harrington says he plans to appeal the conviction in the Jackson County Circuit Court. That conviction revolved around nine misdemeanor charges that come from a 1925 law. That archaic ordinance bans what state water managers called “illegal reservoirs.” “The government is bullying,” Harrington said in an CNS News, last Thursday. “They’ve just gotten to be big bullies and if you just lay over and die and give up, that just makes them bigger bullies. So, we as Americans, we need to stand on our constitutional rights, on our rights as citizens and hang tough. This is a good country, we’ll prevail,” he added. It all started back in 2002, when Harrington was attacked for having three “reservoirs” (ponds) on his large 170 acres of land. But the state claims that collecting water requi...
Post a Comment
Read more

Devotion - FORGING FORWARD

“And the LORD said unto Moses, Wherefore criest thou unto me? Speak unto the children of Israel that they go forward” - Exodus 14:15  It is unfortunate that many youths do not see the need or have the zeal to move forward in life. Rather, they find a comfort zone at the bottom of the ladder of life.  A story was told of a young man from a very rich home, who completed primary school but chose to waste away his life with vagabond lifestyle, despite his parents’ wish to sponsor him up to university level.  All his mates, including those who were not as bright as he was, made it in their academic pursuits. He ended up an outcast, and by the time he came back to his senses and returned to persuade his parents to send him to school, alcohol had damaged his brain. It is not God’s desire that you remain static in your plans but that you make steady progress. God does not expect you to remain the same way over the years without moving forward.  Striv...
Post a Comment
Read more