THE IMPORTANCE OF INSURANCE


Insurance, legal contract that protects people from the financial costs that result from loss of life, loss of health, lawsuits , property damage. Insurance provides a means for individual and socities to cope with some of the risks faced in everybody life. Prople purchase contracts of Insurance, called policies, from a variety of insurance organizations. bijay-lifeinsurance.blogspot.com/

Almost everyone living in modern, Industralized countries buys insurance. For instance, laws in most states require people who own a car to buy insurance before driving it on public roads. Lenders require anyone who finances the purchase of a home or car with borrowed money to insure that property. Business partners take out life insurance on each other to make sure the business will succeed even if one of the partners dies. bijay-lifeinsurance.blogspot.com/

Insurance benefits sociey by allowing individuals to share the risks faced by many people. But it also serves many other important economic and social functions. Because Insurance is available and affordable, banks can make loans with the assurance that the loan's collateral is covered against damage. This incresed avaibality of credit helps people buy homes and cars. Insurance also provides the capital that communities need to quickly rebuild and recover economically from natural disasters, such as tornadoes or hurricanes. bijay-lifeinsurance.blogspot.com/

Insurance itself has become a significant economic force in most industrialized countries. Employees buy insurance to cover their employees against work related injuries and health problems. Businesses also insure their property, Includint technology used in production, against damage and theft. Because it makes business operations safer, insurance encourages businesses to make economic transactions, which benefit the economies of countries.

Insurance companies peform a type of monetary redistribution- they collect premiums and eventually redistribute that money as payments. Depending on the type of Insurance , redistribution can take anywhere from a few months to many decades. Because of this delay between collecting and paying our funds, insurance companies invest their fund to bring in extra revenues. Such investment help businesses and government finance their operations, and profits from those investment support the operations of insurance companies. With these investment earnings, Insurance companies can keep rates much lower than would otherwise be possible.

Not all effects of Insurance are positive ones. The possibility of earning insurance payments motivates some people to attempt to cause damage or losses. Without the possibility of collecting insurance benefits, for instance, no one would think of arson, the willful destruction of property by fife, as a potential source of mone. bijay-lifeinsurance.blogspot.com/

TYPES OF INSURANCE

Most Insurance falls into four main categories, according to what it covers :

1) Property and casuality
2) Life
3) Health
4) Old-age and employment

Insurers commonly refer to insurance purchased by individuals as personal lines coverage and to Insurance purchased by businesses as commercial coverage.

POST by Bijay Thapa. bijay-lifeinsurance.blogspot.com/