“Insurance surely protects you from physical and material losses, but not from emotional and spiritual problems.”
We may have our life, body or property insured. The insurance company makes good our losses as we pay the insurance premium (amount of insurance money) regularly. Insurance is clearly of great importance and advantage. Firstly, insurance, like banking, promotes savings. When we are insured, we have to pay the premium. For this, we have to save or put aside the money. This surely helps us develop saving habits, and we learn to avoid wasteful expenditure.
Secondly, insurance promotes investment. The insurance company can easily invest its funds in industry, agriculture or commerce. When the insured person or his heirs (those getting his money or property after his death) get the insurance money back, they can invest it in some business or industry. All this helps the national economy to grow.
Fourthly, insurance, as we all know, protects us against dangers to life and property. If a person has got his life insured, his family will get enough money on his death. If he has had an insurance policy for a shop, he can get compensation (payment for loss) for fire, theft, etc. He can get his goods insured while dispatching them by train, by truck, by air or by ship.
Insurance guarantees a happy family life in the future. Wives and children get regular payments after the death of the insured heads of families. Insurance helps commerce and industry to progress and expand in safety. Insurance companies invest public funds in housing schemes, industry and commerce and then reap huge profits in the process. Later, the insurance companies reinvest these profits in commercial buildings, industrial units and other profitable institutions owned by them. In this way, these companies provide sources of income to their owners and employees and members of the public who have their policies and shares. In this way, insurance companies promote economic activities and provide. employment to hundreds and thousands of deserving people.
In the advanced countries, we have education, health and employment insurance. The government mostly arranges the insurance for the education of needy students, healthcare for the sick and allowances for the unemployed. This is called social insurance and all working and earning citizens have to pay a part of their income towards it. With rapid (fast) economic development and expansions of education, we shall have a rise in the income of the people. Then they will be able to contribute to social insurance easily.