Importance Of Life Insurance

Life Insurance:

Insurance has become the most important economic way in most of the countries. In many industrialize countries. It plays a vital role for the growth in economic conditions. Followers of Greek and Roman religious societies gave the life insurance benefits to their inhabitants. In 1759 first life insurance Company was established in North America, and there is a great revolution in life insurance sector in 1840. Afterwards it has become the most powerful economic industry. Life insurance provides the financial security to our family against our death.

Mostly young generation does not know the importance of life insurance because they did not think about the death and they do not take it seriously but with the passage of time as we grow up our needs increase. We can face the economical crises but the life insurance provides a most trusty platform to secure our family life financially. Life is uncertain and you know that your family will not face financial crises because you have purchased insurance policy and you have secured their family future. Life insurance provides the safety against many uncertainties.

Types of life insurance:

 There are two types or life insurance

          i) Whole life insurance          ii) Term insurance

 What is whole life insurance?

  It is also known as permanent life insurance. It provides the benefits if insured person expired at any time or after a certain time period which mentions in contract. It always gives the payment according to the contract which has mentioned in contract. It provides the benefits to insured and his family after his expiry.

What is term insurance?

 It provides the benefits with in a specific time period if in that time period, insured person has expired, which is mention in contract while purchasing insurance policy. It is not as expensive as compare to permanent life insurance.

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What is insurance?

Insurance is the contract between two parties, in which one party promise to fulfill the loss of other party.

Parties in insurance:

There are two parties in insurance contract.

               i) Insurer

               ii) Insured

Who is Insurer?

Insurer is the party who pays the claim.

Who is Insured?

The party who faces the loss and claim for the recovery of loss.

What is Policy in insurance?

It is the document which shows the contract between insured and insurer.

What is Premium in insurance?

It is the payment which is given by the insured at the time of signing a contract.

Types of insurance:

Insurance has following  types;

               i)   Life Insurance

               ii)  Group Life insurance

               iii) General Insurance

What is Indemnity?

It is the amount given by the insurer to the insured when insured faces any loss.

Why we purchase insurance?

Life is full of uncertainties. There is always a chance of loss. We purchase insurance for our financial security. If we have lost all savings then insurance will help us to recover all losses. Insurance provides us the security against any loss. It is the best way to secure our family financially.

Importance of insurance:

Economic stability is not permanent. There is always a chance of financial crises. We can’t secure our future financially no doubt how many savings we have. Life insurance provides a platform to secure our future financially. It provides an option to save money over a long time.

Impact of insurance on Economy:

Insurance sector plays a vital role in the economy of the state.  Insurance sector eliminates the unemployment factor from the region because insurer continuously invests in different businesses.  It provides new and best techniques and ideas to start a business.

As insurance sector does business at large scale so it pays large amount tax to the sate which in result to increase the economy of the state. It is the best way to boost up the economy in any country.