Insurance has many importance in individuals life, social life and society for transforming our evil modernity, too. The role and importance of insurance are as follows:
(i) individual, and family
(ii), to business or industry,
(iii to the society.
To individual and family
1. Security and Safety:
The insurance provides safety and security against the loss on any event. In other words, security against premature death and old age are provided by life insurance. the property of insured is secured against loss on a fire in fire insurance. Insurance provides security against the loss at damage, destruction or of property, goods, furniture and machines too.
2. Peace of Mind:
. Insurance helps in reducing fear and uncertainty, fire accident, damage and death . these risks are almost beyond the control human and in occurrence of any of these events people can bear loss of peace of mind. By insurance much of the uncertainty that causes the loss of peace inside an individual is eliminated.
3. Insurance protects Mortgaged Property:
When an insured dies and the insured property is not named to any other nominee then that property is protected by the insurance company or is given to the closest member of the family. On the other hand, the mortgagee wishes to get the property insured because at the damage of the property he will lose his right to get the loan replayed.
4. Life Insurance encourages saving:
Insurance encourages the habit of saving to an individual because the insured should compulsorily pay the amount of premium in time as stated in the agreement .
Systematic saving am possible because regular premiums are required to be compulsorily paid. In insurance the deposited premium cannot be withdrawn; only the deposited amount along with the interest is paid. The insurance, thus, provides the wished amount of insurance and the bank provides only the deposited amount,grace of 3-4 days is also rewarded.
5. Family Needs and old age
Every person is responsible for the welfare of family insurance thus helps to ensure peace and prosperity to all the family members with protection of life , property they own , health and financial risk on their particular investment.When people turn old they cannot earn . They may or may not get pension as per their nature of contribution in their youth and as per their nation’s concerns. So, insurance helps them to move their livelihood ahead due to helping them replaying back their insured amount in time when they need the most Education. There are certain insurance policies, and annuities which are useful for education of the children irrespective of the death or survival of the father or guardian.
6. Uncertainty of business losses is reduced:
industry has a huge number employed people With a slight negligence, the property may be destroyed. The accident may harm not only to the individual or property New establishment are possible only with the help of insurance.
A employed people also may not be sure of his life and again, the owner of a business might be in great loss, by making an annual payment, to secure immediately, insure policy can be taken.
7. Business-efficiency is increased with insurance:
When the owner of a business is free from of losses, he will certainly devote much time to the business. The care free owner can work better for the maximization of the profit. The new as well as old businessmen are guaranteed payment of certain amount with the insurance policies at the death of the person; at the damage, destruction or disappearance of the property or goods.The insurance, removing the uncertainty, stimulates the businessmen to work hard.
8. Enhancement of Credit:
If the property of the business enterprise is insured then that insurance company on behalf of the creditors can help to get loan very easily.
9. Business Continuation:
any partnership business may discontinue at the death of any partner although the surviving partners can restart the business, however there can be many kinds of losses/ but Each partner may be insured for the amount of his interest in the partnership.with the help of property insured, the property of the business is protected against disasters and the chance of disclosure of the business due to the tremendous waste or loss.
10. Welfare of Employees:
Employees are the assets of the organization. Thus, business firm fulfill the responsibilities by doing insurance for employees. It is the welfare of employees from which the firm can move to its destination with the help of employees.
11. Wealth of the society is protected :
The loss of a particular wealth can be protected with the insurance. Life insurance provides loss of human wealthiness, human material can generate less income. Similarly, the loss of damage of property at fire, accident, etc., can be well settles by the property insurance; cattle, crop, profit and machines are also protected against their accidental and economic losses.With the advancement of the society, the wealth or the property of the society attracts more hazardous and, so new types of insurance are also invented to protect them against the possible losses.each and every member will have financial security against old age, death, damage, destruction and disappearance of his wealth including the life wealth. Through prevention of economic losses, instance protects the society against degradation.
12. Economic Growth of the Country:
For the economic growth of the country, insurance provides strong protection against loss of property and adequate capital to produce more wealth. The agriculture will experience protection against losses of cattle, machines, tools and crop.This sort of protection brings more production in agriculture, industry, factory machines. insurances provide more confidence to start the industry and welfare of employees create a better atmosphere to work: Similarly in business, too, the property and human material are protected against certain losses; capital and credit are expanded with the help of insurance. Thus, the insurance meets all the requirements of the economic growth of a country.