Advantages of insurance
4. Importance / Advantages of insurance:
Future is uncertain. Uncertainties are the life and business makes plans futile and investment valueless. The process of insurance has been evolved to safeguard the interests of people from uncertainty by providing certainty of payment at a given contingency. The insurance principle comes to be more and more used and it is useful modern affairs. In order to minimize the risk, different types of insurance policies are taken, Insurance policies are advantageous in the following aspects:
a) Insurance provides security and safety: The insurance provides safety and security against the loss of a particular event on future. In case of life insurance, the loss of an individual cannot be compensated but the receipt of the insured amount from life insurance company helps him in standing on his own similarly, the poverty of insured is secured against loss on a fire in fire insurance.
b) Profitable Investment: The amount which is deposited in life insurance Company as premium is profitable investment. Whenever is paid it is received with bonus on the death or expiry, whichever is earlier.
c) Compulsory Saving: In order to continue the policy, payment of the premium is must. The policyholder has to save money so that he may be able to pay insurance premium.
d) Industrial development: The insurance companies collect the huge amount as premium. These funds are invested in industrial ventures and cause industrial development
e) Tax Saving: Insurance policy helps to save the tax of a person or business firm. If a person or firm pays the premium to insurance company, they can save the tax for the amount they pay as premium.
f) Facility in foreign trade: Now a days, foreign trade basically depends on shipping. There are various risks in conducting foreign trade through sea routes. Marine insurance companies provide economic security against such risk and helps foreign trade prosper. The marine insurance policy helps to make foreign trade risk-free and easy.
g) Increase efficiency: Insurance keeps the businessmen free form worries about various risks. Their self confidence becomes strong. As a result, their work efficiency also increases.
h) Peace in mind: An insurance company provides the different kinds of insurance policies against the risk. A policyholder may be immune from different kinds of difficulties such as accidents or events that are possible to happen in future like firebase, accidents, storm, wind, burglary and housing breaking, So, a person obtains peace in mind from it.
