People live in society. Society is full of risks and uncertainty Insurance is a social device providing financial compensation to those who suffer from misfortune. Such payment being made form accumulated contribution of all parties participating in the scheme. Insurance provides stability, in the society by necessary arrangement of security against loss form unexpected risks. Society becomes more peaceful and safe by insurance, which provides different benefits and financial security against losses form risks. The major benefits of insurance to society are given below.
1. Indemnification for Loss:
All remembers of society are facing different risks. If risks are insured, all losses occurred form unexpected risks are indemnified Indemnification permits individuals and families to be restored to their former financial after to loss occurs. As a result, they can maintain their financial security.
2. Fewer Burdens to Society
Because insureds are restored either in part or in whole after a loss occurs, they are less likely to apply for public assistance welfare benefits, or to seek financial assistance from relatives and friends. So other members of the society need not help the unlucky member even after suffering from loss. If the individuals has not insured the risk, the relatives and friends should support him financially, when he becomes unlucky victim from the risks.
3. Source of Investment Funds.
Insurance is a business of collection of fund and payment to insureds suffered from unexpected incidents. Hence, insurance industry accumulates funds as premium from society and become an important source of funds for capital investment. Insurance companies collect premiums in advance of the loss and funds not needed to pay immediate losses can be loaned to business firms. Generally, insurance companies invest such funds typically in shipping centers, hospitals, factories, housing development etc. In this way, insurance industry creates capital fund and promotes economic development of a country.
4. Less worry and Fear
Another benefit of insurance to society is that it decreases the worry and fear of members of society regarding the risk of accident and premature death. If family heads have adequate amounts of life insurance, they are less likely to worry about the financial security of their dependents in the event of premature death, Simiarly, businessmen who are insured enjoy greater peace of mind because they know are covered if a loss occurs.
5. Prevention of loss
When losses occur from risks, the insurer has no indemnify them financially Since loss of insured is transferred tom insurer in the insurance policy, the insurance company should bear the risks. it means occurrence of loss from the risks is the loss of the insurer, not of the insured. hence, the prevention as well as now becomes the interest of the owner of the property as well as the insurance company. That is why, insurance companies are actively involved in numerous programs about loss-prevention. they employ a wide specialists in fire prevention, occupational safety engineers and specialists in fire prevention, occupational safety and health, and products liability. Some important loss prevention activities that insurers strongly support include the following programs.
a. Prevention of Fire
b. Prevention of boiler explosion
c. Prevention of auto thefts
d. Prevention of defective products
e. Prevention of arson losses
f. Reduction of road accident and death
g. Reduction of work related disabilities
h. Educational programs on loss prevention
The loss prevention activities reduce both accident and loss from accident remarkably.
1. Indemnification for Loss:
All remembers of society are facing different risks. If risks are insured, all losses occurred form unexpected risks are indemnified Indemnification permits individuals and families to be restored to their former financial after to loss occurs. As a result, they can maintain their financial security.
2. Fewer Burdens to Society
Because insureds are restored either in part or in whole after a loss occurs, they are less likely to apply for public assistance welfare benefits, or to seek financial assistance from relatives and friends. So other members of the society need not help the unlucky member even after suffering from loss. If the individuals has not insured the risk, the relatives and friends should support him financially, when he becomes unlucky victim from the risks.
3. Source of Investment Funds.
Insurance is a business of collection of fund and payment to insureds suffered from unexpected incidents. Hence, insurance industry accumulates funds as premium from society and become an important source of funds for capital investment. Insurance companies collect premiums in advance of the loss and funds not needed to pay immediate losses can be loaned to business firms. Generally, insurance companies invest such funds typically in shipping centers, hospitals, factories, housing development etc. In this way, insurance industry creates capital fund and promotes economic development of a country.
4. Less worry and Fear
Another benefit of insurance to society is that it decreases the worry and fear of members of society regarding the risk of accident and premature death. If family heads have adequate amounts of life insurance, they are less likely to worry about the financial security of their dependents in the event of premature death, Simiarly, businessmen who are insured enjoy greater peace of mind because they know are covered if a loss occurs.
5. Prevention of loss
When losses occur from risks, the insurer has no indemnify them financially Since loss of insured is transferred tom insurer in the insurance policy, the insurance company should bear the risks. it means occurrence of loss from the risks is the loss of the insurer, not of the insured. hence, the prevention as well as now becomes the interest of the owner of the property as well as the insurance company. That is why, insurance companies are actively involved in numerous programs about loss-prevention. they employ a wide specialists in fire prevention, occupational safety engineers and specialists in fire prevention, occupational safety and health, and products liability. Some important loss prevention activities that insurers strongly support include the following programs.
a. Prevention of Fire
b. Prevention of boiler explosion
c. Prevention of auto thefts
d. Prevention of defective products
e. Prevention of arson losses
f. Reduction of road accident and death
g. Reduction of work related disabilities
h. Educational programs on loss prevention
The loss prevention activities reduce both accident and loss from accident remarkably.
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