Importance of Insurance to people:
1- Insurance provides security and safety:
Insurance provides safety and security against the loss on a selected event. just in case of life assurance, payment is formed once death happens or the term of insurance expires.
The loss to the family at a premature death and payment in maturity square measure adequately provided by insurance. In alternative words security against premature death and maturity sufferings square measure provided by life assurance. In alternative insurance, too, this security is provided against the loss at a given contingency. For eg. property of insured is secured against loss thanks to fireplace in insurance.
2- Insurance affords peace of mind:
Insurance offer security that is that the prime motivating issue. It tends to stimulate a private do a lot of work.
Insurance protects encumbered property: At the death of the owner of the encumbered property, the property is confiscate by the investor of cash and therefore the family is bereft of the utilization of the property.
On the opposite hand, the creditor needs to induce the property insured as a result of at the harm or destruction of the property he might lose his right. Insurance provides adequate quantity to the dependents at the first death and therefore the property-owner to pay off the unpaid loans. Similarly, the creditor gets adequate quantity at the loss of the property.
Insurance eliminates dependency: At the death of the husband or father or earning mother, the loss to the family desires no elaboration. Similarly, at destruction of property and merchandise, the family would suffer tons. The economic independence of the family is reduced or, sometimes, lost entirely. Insurance tries to eliminate dependency.
3- Life Insurance encourages saving:
The weather of protection and investment square measure gift solely just in case of life assurance. In property insurance, solely protection component exists. In most of the life policies parts of saving predominates. Systematic saving is feasible as a result of regular premiums square measure needed to be mandatorily paid. In insurance the deposited premium can not be withdrawn simply before the termination of the term of the policy.
The compulsion to pay premium in insurance is therefore high that if the policy-holder fails to pay premiums inside the times of grace, he subjects his policy to lapsation and should revisit solely a really nominal portion of the whole premiums paid on the policy. For the preservation of the policy, he needs to strive his maximum to pay the premium.
4- Life Insurance provides profitable investment:
people unwilling or unable to handle their own funds square measure happy to search out AN outlet for his or her investment in life assurance policies. the weather of investment i.e. regular saving, capital formation, and come back of capital in conjunction with sure further come back square measure utterly ascertained in life assurance. life assurance fulfills of these needs at an occasional price.