What are the advantages of insurance?
Importance of insurance
The contributions of insurance to the business community and human life are significant.
The importance of insurance can be understood by the following facts.
- Reasonable profit
The businessmen can earn a reasonable profit for their businesses. The insurance can help them earn the same rate of profit if their business fails to generate income.
- Sense of security
There are many chances for losses in a business. But due to insurance, the risk of losses is transferred to the insurance company, which gives a sense of security to businessmen.
- Employment increase
The insurance companies provided jobs for thousands of people. In this way, the problem of unemployment is reduced.
- Protection of property
Due to insurance the personal and business property is protected from natural losses such as accident, fire, etc.
- Solve the social problem
Insurance is useful device for solving the social problems. In cash of death provides finance to his family compensation is available to overcome the industrial injuries and road accident.
- Favourable balance of payment
The insurance of business is an invisible export and it provides sufficient contribution toward the balance of payment
- Equitable premium
The large policy holders provide large funds and small policy holders pay less money in common funds. In the way the amount of premium becomes equitable.
- Research facilities
The insurance companies can conduct research about the rate of accidents, deaths, and losses faced by business units.
- Low price
The risk of loss is covered by the insurance policy. In the way insurance companies help businesses sell their products as low prices.
- Spread of risk
A large number of persons get marine, fire, life insurance policies and pay premiums to the insurance companies whenever a loss occurs, it is compensated out of the funds of the insurers. The loss is spread among a large number of policy holders.
- Promotes economic growth
Insurance contributes to the efficiency of businesses and promotes economic growth and development.
- Gives sense of security
At every moment there is a chance of loss in business. Due to insurance risk is a transferred to the insurance company and gives the sense of security to businessman.
- Promotes business competition
Insurance also protects the small industrial units and also provides credit facility. So competition with the big firms increase which is very useful the customer.
- Promotes international trade
Insurance companies are playing a very effective role in promoting the growth of international trade. Today, an exporter can send his goods to another country without fear of damage or loss. Because he shifts his risk to the insurance company by paying the premium, if the ship is damaged, the insurance company will compensate for the loss.
It’s great that you talked about how insurance could protect personal and business properties from natural losses, like an accident or fire. I was reading a brochure about insurance and learned about the different types of insurance schemes being offered. I read that there is even farm insurance, and I think it is really convenient how insurance could cover just about almost anything.