What is Insurance, Meaning and Importance of Insurance?

Well, insurance has become the most vital necessity, well the risk being uncertain to the future, we have tried to cover the topic on insurance “what is insurance, Meaning, and importance of insurance?” 

Insurance is a legal contract between 2 parties i.e, the insurer(insurance company) and the insured (policyholder),
insurance is the most efficient risk management tool which provides the policyholder the guarantee of financial uncertainty to him or to his family in case of future uncertainty.

In other words, Insurance is a legal contract between the two parties, the insurance company(insurer)
the policyholder(insured), it provides financial protection coverage from future uncertainty.

Importance of Insurance:

• Insurance protects you and your family to recover from the loss:
  Firstly, insurance provides us financial help to recover from the losses we have incurred,
  It gives an assurance to the assured that if there is any uncertainty in the future he’s family will be covered
  and it will provide them the financial stability.
• Insurance reduces your burden of the medical expenses:
  If in case of a medical emergency the insurance company will pay all medical expenses to ease out your stress,
  you don’t have to worry about paying the medical bills, all you have to do is provide your insurance policy papers,
  the hospital will take care of the remaining claim process.
• Insurance provides your family the financial support:
  If you are the head of your family or the only source of income it is very risky for your family if you die there
  won’t be any source of income while that is where the insurance company will provide your family (Nominee)
  the financial stability to sustain itself.
• Home protection:
  In case of robbery and even in case of natural disasters like earthquake, tsunami, etc
  your policy will provide you the financial assistance after examining the estimation of the loss.
• loan option:
  Insurance can even be put across collateral for applying for a loan it is considered as an asset if in case the person dies,
  the loan amount will be recovered from the insurance policy, But on today’s date if you want to take a loan.
  furthermore, it is compulsory to have insurance.
• Child protection:
  It means investing/saving your money for the sake of your child education or marriage etc.,
  It not only provides you the maturity coverage (maturity coverage means you pay the premium for a policy for tenure
  and when the policy is completed the amount will be paid back to you with a specific interest rate)
  but also provides you with death/accidental coverage.
• Tax Benefits:
  The most important benefit if you are a salaried person as a result of SEC 80C  of the Indian Income Tax Act
  as levied to you, you can write your claim a rebate on the premium you have paid for the insurance policy.
• Return on Investment:
  A life insurance policy not only provides you the protection for a lifetime but also provides you
  with a pretty good return.

 

Conclusion:
In summary, as we have covered the topic “What is Insurance, Meaning, and Importance of Insurance?”
as insurance has become the necessity of human life to minimize the risk factor associate with everything,
It provides you and your family financial stability in case of emergency.