Insurance has any functions and significance to us. The the insurance company is to cover the interest of the people in case the unfavorable event occurs. It is also referred to as a social process of eliminating the risk from loss to life, and proper. The insurance industries contribute a lot to the securities and safeguarding of the property.
The major role of the insurance is to provide security and safety. Insurance provides financial support and thus reducing the insecurities that can be faced by the individuals. For example the people who work in the fire-prone areas can be protected against fire. Insurance companies also undertake to protect the people against the calamities such as the floods and diseases.
Another importance of insurance is that it works to generate financial resources. The insurance companies generate income from the premiums paid by the clients. Being able to buy the government stock is one of how the insurance company can be able to invest the amount generated from the premiums received. The premium increases the general profit of the country.
The improvement of the economy leads to the economic development of a country. The profit that is gained is invested in various sectors.
Ensuring a company encourages savings. The insurance encourages people to save more. This is by being able to protect the people from the risks that they would suffer from. People who take life insurance give a monthly premium which acts as savings.people can invest especially the ones taking the insurance policy for life. Immediately the contract matures; the insured individual gets the lump sum amount at the maturity of the contract.
The insurance plays a big role in the growth of the country’s economic status.
The insurance company plays a significant role in being able to pool the domestic savings. The insurance company can bring into play the commercial activities which bring about the economic growth of a particular country. The country’s economic status is greatly influenced by the insurance company. Medical support is essential in managing the risk of health’s rise in the medical expense is of great concern. Medical insurance is a policy that caters to the different type of health risks. The insured gets a medical support in the case of medical insurance policy.
One of the key objectives of the insurance company is that it can spread the risk to a large group of people. Most of the people pay the insurance premiums to the insurance company. The insurance premium paid is able to compensate a given party in case a loss occurred.
Large funds can be collected by the way of premium. The funds are utilized in the industrial development of a country, thus increasing the economic growth.