Importance of Insurance

We may have our life, body or property insured. The insurance company makes good our loses as we pay the insurance premium regularly. Insurance is clearly of great advantage and importance. Firstly, insurance, like banking, promotes savings. When we are insured we have to pay premium. Secondly, insurance promotes investment. The insurance company can easily invest its funds in industry, agriculture and commerce. When we insured a person or his heirs get the insurance back, they can invest it in some business or industry. All this helps national economy to grow. Thirdly, the insured person can get loans against the security of insurance policy from insurance company or from banks

Fourthly, insurance as we all know, protect against dangers to life and property. If a person has got his life insured, his family will get enough money on his death. If he had an insurance policy for a shop, he can get compensation for fire, theft etc. He can get his goods insured while dispatching them by train, by truck, by air or by ship. Insurance guarantees a happy family life in future. In advance countries we have education, health and employment insurance. The government mostly arranges insurance for education of needy students, health care for sick and allowances for unemployed. This is called social insurance. With rapid economic development of education, we shall have a rise in income of people. Then they will be able to contribute to social insurance easily.
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