Risk is involved in every aspect of life. Be it the life itself, the surroundings we live in, the property we own, the health we possess, the vehicle we drive, the gadgets we use, or the business we operate. Everything is under an unforeseen threat. And whenever we talk about the risk we come up with term insurance. Insurance is nothing but a way to minimize the risk that we may face. It is the way of handling the damages by assisting them with insurance so that we can minimize the losses. Insurance is a method in which an individual or organization goes into a legal contract called a policy with the insurance company (insurer) to overcome the losses that may be due to risks involved in the return of the money called a premium that is paid by the insured to the company. Insurance is just sharing of risk between the two without which all the losses would come into the account of the individual or organization involved. It is a type of risk management technique against unexpected losses.
Insurance may be of various types and covers almost all the aspects of our daily life routine like life insurance, health insurance, vehicle insurance, travel insurance, business insurance, property insurance, etc. as everything involves risks that cannot be foreseen and thus insurance plays a crucial role to minimize the risk involved. Being insured helps us to bear losses easily as the losses are distributed among the individual and the company making it easier for the individual to cope with the unfavorable situation.
Insurance helps a person to get the timely payment when he is in a state of loss like health insurance helps to get timely treatment in any medical emergency, life insurance secures the future of the family after his death, and business insurance acts as a shock absorber when anything uncertain happens in the business or to its property, vehicle insurance secures the vehicle from the losses of accidents or theft. Thus insurance is a way that we can handle the adverse conditions in a systematic and efficient way without panicking and it also helps us to recover from that in a quick and smooth way with minimum damages caused to our financial status.
Insurance also helps to develop a quality of savings among the individual as a part of our income goes in the premium at regular intervals and this when gives returns in case of emergency it gives us the importance of savings in our life. So insurance can also be said as an investment made against future risks. It also secures international trade by ensuring the goods exported thus promoting international trade.
The adoption of insurance by a large number of people also helps the insurance companies to develop and invest for the benefit of the nation and it also helps to create employment. Knowing the development that these companies provide the government also promotes such activities by making the insurance claim amount and premium tax-free under certain terms and conditions.
Knowing all the advantages and importance of insurance it is necessary that we promote this and make people aware. It is not only going to provide security to us, our loved ones, and to our belongings but it also directly or indirectly helps our country in terms of investment and development.