The benefit of Insurance on Individual and Organizations
Insurance is a legitimate contract that is formed between two parties, the insurance company (insurer) and the individual (insured). The contract usually is about the promise to cover all the related to the insurance, losses of the insured caused due to accidents.
The contingency or the accident is the reason for the loss. It may vary to damage of the insured’s vehicle or property or injuries to the insured themself. The reason why it is called contingency is that it is very uncertain and one can never predict these events.
While the insurer covers the loss in uncertain situations, the insured has to pay the premium annually in return. This premium depends on the type of insurance the insured has purchased.
Types of Insurances:
There are mainly four types of insurances in the world:
This type of insurance covers the loss or damages done to our insured homes. These losses and
damages can occur due to natural calamities or even accidents like fire or earthquakes, etc.
Life insurance is very important. They provide for your family or whoever you choose in case of your uncertain death. They are very necessary in situations, where you are the only one earning in your house.
Health insurance comes in handy for you. They cover the general expense of your medications and illness. They also cover for the general tests, medication costs and treat, and even hospitalization.
Another type of insurance is automobile insurance. In this, the insurer covers the loss in case of automobile theft or damage to your car.
Advantages of Insurance on Individual, Organization, and Society:
- Having insurance has multiple advantages to individuals as well as organizations and the entire society in general. Many people do not realize these benefits but learning about them never hurts. Some of these advantages are more obvious than others.
- The first and foremost benefit of having any type of insurance is the payment of the losses. The insurance reimburses the individuals or organizations for the losses they have somehow experienced. It is in the contract of the policy.
- The second more important advantage of this insurance for an individual or organization is the coverage of uncertain cash flow. This means that if you or your company has good insurance, any loss that is uncertain and occurs which normally you would have to pay right out of your pocket, will be covered by the insurance. Therefore, these uncertain cash flows are diminished to an amazing amount.
- The third and very unique and fantastic advantage of the insurance is to act in accordance with all the legal obligations. The insurance meets all the legalities and compulsory requirements as well as offers evidence of fiscal resources.
- Another amazing and very important benefit of insurance is that it improves risk control action. The insurance policies offer many prepositions to execute a loss control activity because of the policy specifications and the premium savings prepositions.
- Another extremely beneficial feat of insurance is the practical utilization of the insured’s sources. Having insurance means you do not need to save a large amount of sum overtime. You can simply purchase insurance and the insurer will cover all the risk exposures and uncertain fiscal situations. This provides the insured to use their money more effectively.
- One more very common and well known and necessary benefit of insurance is the support for the insured’s assets. The insurance companies provide loans to the individuals and organizations as well by ensuring the fact that the loaner will be paid completely if the deposit for the loan is damaged or impaired by the insured. This helps both parties, the insured, and the loaner as the loaner can easily trust the part which is borrowing the funds since there is insurance involved.
- Talking about amazing benefits and features of insurance, one more would be that the insurance provides a source of investment funds to the insured. Many insurance companies gather the premium upfront and loan those premiums in multiple investment automobiles or pay the claims if they occur at all.
- Last but not least, the advantage of insurance is that it diminishes social burdens from the insured. There are a lot of uncertain situations that can appear out of thin air in the world. These insurance companies support the uncompensated victims of any accidents.