Necessity and Importance of Insurance

We all know that life and death, profit and loss, dawn and dusk are always with us. No one can regulate the ups and downs of life. Those who assume that they will have a smooth life are living with a myth. Preparing yourself for rainy days is the characteristic of wise people. People who care for their family, health, properties, and assets will always think about all uncertainties. The best way of defending yourself from the risk of disability, death, and destruction is to use an insurance policy. No one can deny the importance of insurance as it is necessary for every person. Let’s start the discussion with a definition of insurance.

What is Insurance?

In simple words, insurance is an arrangement between two multitudes; the insurance company and the insurer. The company agreed upon the fact that in case of any loss or damage you will stay safe, and they compensate for all your loss. The insurer exchanges a specific amount called premium to the company. Moreover, during any mishap, they return all your money.

Why Insurance is Important?

Life and death are not in our control, and within a second a car accident or a disease can destroy you. Alternatively, the car you bought after too many efforts damage badly. The business you are running from years turns down into a loss. After such a painful incident the person feels devastated, and there is nothing left behind.

As you grow up, find a partner, raise your family, start a business you responsibility increase. The whole family is relying on you and there the importance of insurance increases. With the help of insurance policies, your bad days can bring a ray of hope and compensation for you. There are some of the benefits of having insurance.

1. Reduce stress during Hard times

We all are living in a world full of uncertainties and incidents. Every passing moment cannot be trusted. Unseen incidents like injury, accident, disability, robbery or even death can leave your family alone. All the doors close at them, and they will be support less. They face not only emotional stress but also broke down financially. However, your one step of having an insurance plan can protect your family in this hour of need. So, they can return to their lives when their financial stress is reduced.

2. Provide Security

Not only in life, but business can also tear down within a few days. Hence, insurance provides safety and security against a particular unwanted event that happens with you. Any damage you can assume like damaging a car in a road accident can be secured with various policies available. Though, building a better tomorrow depends upon the decisions you take today.

3. Promotes economic growth

Insurance can create new ways for the economy through domestic saving. Small capital can bring productive investments. Insurance allows mitigate loss, promotes trade, financial stability and commercial activities that result in the development and growth of the economy. Thus, economic growth is directly related to your growth as it eliminates all the risks and assures you to hold your hand when you are in trouble.

4. Peace of mind

It is evident that nothing can be replaced by you or no one can be that important for your family as you are. However, leaving them in the world full of hardships is not fair. You have to plan for their future so that after you, your family will be financially stable. It brings peace of mind not only for you but also for your kids. So, they can start their life after your loss.

 5. Provide an investment channel

Insurance is not all about securing your rainy days; instead, it also provides you a better chain of saving for the future. A specified amount of premium is offered to the company after a small period; it brings a sense of responsibility and promotes saving. All the insurers develop the habit of saving instead of spending. Hence, it brings many advantages at a personal and professional level.

6.  Save Society’s Wealth

No matter which insurance policy you are going to you use, at the backend you are protecting the wealth of society. All the conditions or calamities society face, insurance is a protection against all the losses. The community gets a balance when certain damages are refunded. Hence, everyone should look towards the well-being of society.

7. Easy to get loans

A person who wanted to have a loan can quickly get a business or personal loan if he is insured. Banks can easily provide credit on property and stock as it gives a sense of protection to the banks. They can trust you comfortably as you are well protected for all mishaps.

8. Social Cooperation

The loss is always hard to bear if it is on the shoulder of a single person. But, if you have a group of people opening their hands for incurring your damage, this critical situation can be a little soothing. Insurance is all about that it holds your back when you are at the highest risk. Thus, insurance provides you social cooperation where various people are joining hands with one another.

9. Tax Benefits

The most significant advantage of buying an insurance policy is the tax benefit. The amount of premium you paid to the insurance company will get a specified percentage of profit. You will be having more than you paid. Isn’t it the most notable advantage for an insurer? Yes, it is.

 There are unlimited benefits of having insurance and those who assume insurance policy non-seriously will be feeling the need whenever they get down. Everyone expects that life will be smooth always, but it is not still true. The graph of life is full of peaks and edges; rather death is linear. So, preparing yourself for bright and light can be beneficial for you. 

 Types of Insurance

The importance of insurance policy is proved above, and those who want to go for insurance will be having a little knowledge about the types of insurances. There are many types of insurances available, and it is up to you to decide which asset you want to insure having the highest priority in your life. All the insurance are broadly categorized into certain types mentioned below.

Life insurance

Life insurance, as the name dictates, it is the insurance on your life. A person buys merely a life insurance policy for financially securing its dependents. It assures that all your family members relying on you will stay safe after your death. This insurance policy is heavily essential for those who are the only earner of their family. The person whose income is the only source for his family. After the person dies having the life insurance policy, his family will be compensated for the loss by the insurance company.

Health Insurance

Health insurance is also among the most widely used strategies for providing health security. The substantial cost of medical treatments cuts down with the use of health insurance. All the diseases and illness are covered in insurance policies. The premium you pay for the health insurance covers all your treatment, medication and hospitalization cost. All these health, disability and life insurance policies lie in the category of personal insurance.

Car Insurance

In this world of the modern world, car insurance or you can say Auto insurance become a necessity. Auto insurance protects your car against accidents and damage. Not only that if your vehicle is damaged in natural calamities like flood, the company also compensate for your loss. At different points you have to pay liabilities to the third parties for damaging their vehicle, the policy also covers that scenario.

Education Insurance

Education insurance is a specialized policy for your kin, and it is used as a saving tool. You pay a specific amount of money every month for collecting a handsome amount for your kid when he needs higher education. You fund the money your children need for their studies for providing them a bright future.

Home Insurance

Home is a paradise for every person, and everyone wants to secure their home. Having home insurance can protect your home against natural calamities like earthquakes, lightning, and fire.

-Business Insurance Big businesses providing job to many employees own great responsibility. Buying business insurance saves you and your employees from uncertainties and losses. It helps to face the dark days and compensate for the loss of your business.

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