What are the Advantages of Insurance ?
The insurance has become an integral part of business and human life. ‘The fear of loss’ has been a constraint on the growth of business and trade. An uncertain future of business and of individual has always been haunting him. Insurance has been helpful in solving many problems of business and private life.
The following are the advantages of insurance:
1. Providing Security:
There is dependably a dread of sudden loss. There might be a fire in the plant, storm in the ocean or loss of a life. In every one of these cases it gets to be distinctly hard to hold up under the loss. Protection gives a cover against any sudden loss. If there should be an occurrence of marine and fire protection the misfortune endured by the guaranteed is completely remunerated and he is reestablished to his before position.
Similarly, if a bread-bringing individual from the family kicks the bucket rashly, the family is given cash to proceed with its work. In this way, protection offers security to both individual and specialist. Nowadays protection covers different social welfare conspires moreover. There are plans accommodating unemployment, ailment, mischance, well-being and maturity protections. These plans are useful for needy individuals and help in setting up social justice.
2. Spreading of Risk:
The basic principle of insurance is to spread risk among a large number of people. A large number of persons get insurance policies and pay premium to the insurer. Whenever a loss occurs, it is compensated out of funds of the insurer. The loss is spread among a large number of policy-holders.
Insurance covers the loss of an individual but the social loss cannot be eliminated. If the property of a person is lost by fire, he will be compensated by the insurance company. The loss of goods will remain as a social loss. Insurance cannot eliminate loss but it can reduce the risk to the individual.
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