The Role and Importance of Insurance in our life
Insurance is a key contributor to society’s economic growth. It provides stability and helps to manage the process. Insurance industries create financial institutions and lower uncertainty by increasing financial resources.
1. Provide security and safety
Insurance provides financial support and helps to reduce uncertainty in business and personal life. Insurance provides protection and security for a particular event. There is always the possibility of sudden loss. one sure insurance offers protection against sudden losses. In the case of life insurance, financial support is offered to the insured’s family upon his death. Other insurance provides protection against loss from fire, marine, or accidents.
2. Generates financial resources:
Premiums collected by insurance companies generate funds. These funds can be invested in stock and government securities. These funds can be used to generate more funds or used for economic development. Investing in large amounts of capital can increase employment opportunities.
3. Savings are encouraged by life insurance
Insurance is not just a way to protect yourself from risks and uncertainties but it also offers an opportunity for investors. The regular payment of premiums allows for systematic savings. Life insurance is a form of investment. The insured develops a routine of saving money through premium payments. At the end of the contract, the insured receives the lump sum amount. This life insurance encourages savings.
4. Encourages economic growth
Insurance has a significant economic impact by generating domestic savings. Insurance transforms accumulated capital into profitable investments. Insurance helps to reduce loss and financial stability. It also promotes commerce and trade activities that lead to economic growth and development. Insurance plays an important role in the sustainable growth of an economy.
5. Support for medical conditions:
Consider medical insurance essential for managing health risk. Unexpectedly, anyone can become a victim of critical illness. Rising medical costs are a concern. One insurance policy that covers different types of health risks is medical insurance. In the case of medical insurance, the insured receives medical assistance.
6. Spreading risk:
Insurance allows for the spreading of risk between the insured and the insurer. Insurance’s basic principle is to spread risk across a large population. Many people purchase insurance policies that cover their risk and then pay premiums to the insurer. Insurers pay out funds to compensate for losses.
7. Source for collecting funds
Premiums are a way to collect large amounts of money. These funds can be used to boost the country’s industrial development, which in turn accelerates its economic growth. These large investments increase employment opportunities. Insurance has been a major source of capital formation.