ADVANTAGES OF INSURANCE TO INDIVIDUALS
Insurance transfers the risk of financial loss from an individual to a company. The insurance company is based on cash reserves from the premiums paid by its customers. The risk of loss is shared among these individuals, who agree to pay a specific amount in premiums in return for the promise of recouping a certain amount in the event of a loss. The areas of insurance available to individuals are mainly the four parts listed below:
- Life Insurance: This is a type of insurance which is done to provide financial assistance for the whole family when the policy owner is dead.
- Health Insurance: This is a type of insurance which provides financial support for any health issue faced by the policyholder or his family
- Property insurance: When your property is damaged by fire or any other disaster, this insurance will cover you by providing financial support where necessary.
- Auto Insurance: This type of insurance provides financial support for our damaged car.
Insurance is important because both human life and business environment are characterized by risk and uncertainty. Insurance plays a key role in the mitigation of risks. The benefits of insurance to individuals are discussed below:
Insurance provides security against risk and uncertainty
This is one of the most outstanding benefits of insurance. Uncertainties are the realities of life, with insurance, a security against these uncertainties and risks are covered
It enables the insured to concentrate on his work without fear of loss due to risk and uncertainty.
The fear of uncertainty and risks can actually paralyze one’s efficiency, productivity and focus. When things that give grave concerns are insured, you get relaxed a bit and concentrate on other pressing demands
It inculcates regular savings habit, as in the case of life insurance.
Those with negative saving attitudes, through life insurance, have learned to be more prudent in spending. This is another benefit.
The insurance policy can be mortgaged and funds raised in case of financial requirements.
This is another fantastic means of raising funds by individuals. Insurance policies could be mortgaged and funds could be raised
Insurance policies, especially pension plans provide for income security during old age.
Many old folks are feasting on the income provided through insurance pension plans. This income becomes quite handy at old age when the bones become so weak and strength becomes feeble. One can have something to fall back to even while not working.
The insured get tax benefits for the amount of premium paid.
The amount of tax benefits one gets is directly dependent on the amount of premium paid. These benefits are realizable within the confine of insurance.
Insurance of goods may be a mandatory requirement in certain contracts.
Insurance affords one the legal backing of legitimacy and right standing in some businesses. Goods must be mandatorily insured before a contract is awarded or during the proceedings of such a contract.
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Every other thing being equal, every individual need and insurance backing in all our dealings. Insurance is necessary if not needs a protect against risks and uncertainties