Articles
Why Is General Insurance Important?
by Giselle Lobo Writer & BloggerAll of us live in a world full of uncertainties and risks. No one can predict the risks they may face in their families, businesses, properties, or assets. It is better to be safe than sorry and start preparing for future emergencies from the present day. You can buy general insurance for yourself and your family to eliminate the cost and effect of loss caused by different risks.
Apart from protecting individuals and businesses from several potential risks, the insurance sector contributes significantly to economic growth. It provides stability to companies and generates long-term financial resources for industrial projects. Among other things, the industry also encourages people to save and creates employment.
Here are a few points explaining the importance of insurance:
- Provides safety to individuals and businesses: An insurance policy provides financial support and reduces uncertainties that individuals and companies face at every step. It mitigates risks against events that can cause financial distress to them. Medical inflation, for instance, grows at approximately 15% per annum, which is enough to disturb a family’s well-calculated budget if they lack medical insurance.
- Generates long-term funds: The insurance sector generates funds through premiums from millions of policyholders. Due to their long-term nature, these funds get invested in building long-term infrastructure assets such as roads, ports, power plants, dams, etc.) that are significant to nation-building. Employment opportunities increase by big investments leading to capital formation in the economy.
- Promotes economic growth: The insurance sector impacts the overall economy by mobilising domestic savings. The general insurance company will turn accumulated capital into productive investments. It also helps you mitigate losses, promotes financial stability, along with trade and commerce activities resulting in economic growth.
- Provides support to families during medical emergencies: From elderly parents to newborn children, medication and hospitalisation play an essential role while ensuring families’ well-being. Rising medical treatment costs and medicine prices are enough to drain your savings if not well prepared. With a health insurance policy, you get financial support in case of a medical emergency.
- Helps to spread risks: Insurance facilitates moving the risk of losses from the insured to the insurance provider. The basic principle is to spread the risk among many people. Likewise, a large population gets insurance policies and pays a premium to the insurer. Whenever a loss occurs, the insurance company compensates it out of the corpus collected from policyholders.
The general insurance company also offers other insurance policies that may hold lots of importance. Motor insurance helps you cover the various damage costs which might occur due to unforeseen incidents. It will help you maintain your car’s lustre while protecting you from hefty expenses.
Health insurance covers various medical costs. The policy document mentions whether the policy covers existing illnesses, what diseases it will cover, and how much sum assured value you will get upon the claim. Home insurance provides you with the benefit of affordable coverage for your property and possessions against any unforeseen event.
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About Giselle Lobo 
Writer & Blogger
32 connections, 1 recommendations, 136 honor points.Joined APSense since, September 14th, 2017, From Melbourne, Australia.
Created on Apr 12th 2021 00:50. Viewed 269 times.
