essay on importance of life insurance

Essay On Importance Of Insurance

In the intricate tapestry of modern society, insurance emerges as a foundational thread that weaves together protection, stability, and progress. By offering a shield against unforeseen financial losses, insurance empowers individuals and businesses to navigate a world fraught with uncertainties. This essay underscores the significance of insurance in contemporary life, elucidating its role in providing financial protection, enabling risk-taking, fostering stability, and contributing to societal advancement.

Table of Contents

Essay: The Crucial Role of Insurance in Safeguarding Individuals and Fostering Economic Growth

Insurance plays a vital role in modern society by protecting individuals and businesses from financial losses, allowing for greater risk-taking and economic development.

Paragraph 1: Insurance provides financial protection

One of the primary virtues of insurance is its ability to extend a safety net against an array of hazards. These hazards, ranging from accidents and illnesses to property damage and unfortunate deaths, carry the potential to plunge individuals and families into overwhelming financial distress. Insurance stands as a formidable bulwark against such adversities, offering a safeguard that ensures individuals do not find themselves mired in insurmountable debt or financial ruin. By distributing the costs of potential losses across a multitude of policyholders, insurance effectively diffuses the burden, thereby preventing the catastrophic impact of individual financial calamities.

Paragraph 2: Allows individuals and businesses to take more risks

The absence of insurance could cast a pall of apprehension over significant life decisions. Ventures like starting a business, embarking on extensive travels, or investing in a home may be approached with trepidation due to the looming specter of financial catastrophe in the face of unforeseen losses. Insurance, however, catalyzes a transformative shift in this narrative. With insurance coverage in place, individuals and businesses can undertake these pivotal risks with greater confidence. This newfound security empowers economic and entrepreneurial pursuits, as the protective buffer against potential losses emboldens innovation, fosters business expansion, and fuels economic growth.

Paragraph 3: Provides stability and security

The tendrils of insurance’s influence extend beyond the mere realm of finances. In the event of life-altering setbacks such as the loss of a loved one or the ravages of natural disasters, insurance plays a profound role in upholding stability and security. Insurance payouts, be it life insurance or property insurance, stand as beacons of hope amidst the darkness of loss. They offer a lifeline that ensures financial security, mitigating the burden of potential upheaval. By freeing individuals from the clutches of financial hardship that often accompany unforeseen calamities, insurance empowers them to direct their energies towards constructive pursuits like work, development, and rebuilding.

Paragraph 4: Benefits society as a whole

The impact of insurance radiates through the societal fabric, rippling outwards to engender benefits that transcend individual and business boundaries. As individuals and businesses are shielded from the dire consequences of losses, their reliance on public welfare systems diminishes. This reduction in demands on public resources ensures a more efficient allocation of government funds and resources, ultimately contributing to the overall well-being of society. Additionally, insurance’s role in bolstering risk-taking and investment cannot be understated. By offering a protective umbrella against potential failures, insurance fosters an environment conducive to innovation, business expansion, and investment. The insurance industry itself is a robust source of employment, playing an indispensable role in the economy and propelling economic growth.

In a world where uncertainties cast their shadows across every facet of life, insurance stands as a beacon of security, prosperity, and progress. By providing a shield against financial losses, insurance not only enables individuals and businesses to take calculated risks but also contributes to the stability and growth of societies at large. Its role in alleviating fears of potential financial ruin and its capacity to stimulate economic dynamism make insurance a cornerstone of modern society. As individuals and businesses are empowered to stride forward with confidence, unburdened by the specter of unforeseen losses, the collective trajectory of progress is illuminated, forging a path towards a more secure, stable, and prosperous future for all.

Write Four Importance of Insurance – Safeguarding You and Your Future

Insurance might seem like a simple thing, but it’s actually super important. Here are four reasons why:

1. Protection from Unexpected Problems:

Life is full of surprises, and not all of them are good. Insurance is like a shield that protects you from getting hurt financially when bad things happen. It covers stuff like accidents, illnesses, and even damage to your things, like your car or house. So, if something goes wrong, you won’t have to pay all the money to fix it.

2. Feeling Secure and Stress-free:

Imagine if you had to worry all the time about what could go wrong. Insurance takes away that worry. It gives you a safety net, so if something bad does happen, you won’t have to panic about money. This lets you focus on the things that matter, like your family, your studies, and your dreams.

3. Helping You Take Risks:

Sometimes, you need to take risks to move forward in life. Insurance gives you the courage to take those risks. For example, if you want to start a business, insurance can cover you if things don’t go as planned. This way, you’re more likely to chase your dreams without being scared of failing.

4. Building a Better Future:

When many people have insurance, it creates a big pool of money that can be used to help anyone who needs it. This is super useful when something really big, like a natural disaster, happens. Insurance helps communities rebuild and get back on their feet faster. Plus, having insurance makes you part of a system that takes care of people and helps the economy grow.

So, even though insurance might seem like just another thing you have to pay for, it’s actually a super smart move. It’s like having a superhero cape that keeps you safe from money troubles and lets you take on life’s adventures without fear.

What Is Importance Of Insurance to Society

The Big Deal About Insurance for Everyone

Imagine if you had a magic shield that could protect you from money troubles when something bad happens. That’s what insurance is like for the whole society. Here’s why it’s a big deal:

1. Safety Net for Tough Times:

Insurance is like a safety net that catches you if you fall into a tough situation. When things like accidents, illnesses, or disasters strike, insurance helps to pay for the damages. This means people don’t have to lose all their money or belongings when something unexpected happens.

2. Helping Everyone Stay Cool:

Without insurance, people would always be worried about what could go wrong. But with insurance, everyone feels safer. You don’t have to stress out about money problems all the time. This lets everyone focus on their families, work, and living their lives.

3. Making Brave Choices:

Life is about taking chances, but some risks can be scary. Insurance gives people the courage to take these risks. For example, starting a business or trying something new. If things don’t go as planned, insurance can help with the costs. So, everyone can try exciting things without being too afraid of failing.

4. Rebuilding Together

When something really big, like a big storm, hits a community, it can be hard to recover. But insurance makes this easier. When many people have insurance, there’s a lot of money to help rebuild homes, businesses, and communities. This way, everyone can get back on their feet faster.

5. Growing a Strong Society:

Insurance is like teamwork for the whole society. When everyone chips in, there’s a pool of money that can be used to help anyone who needs it. This helps the economy grow and makes sure that everyone is taken care of when they need it most.

So, insurance isn’t just something for rich people or big companies. It’s a way for everyone to work together and protect each other. It’s like having a giant umbrella that keeps us dry when it rains unexpected troubles.

Essay On Importance of Life Insurance

Introduction.

Life insurance is a fundamental financial tool that provides security and stability for individuals and their families. This essay examines the significance of life insurance, exploring its benefits, the peace of mind it offers, the various types available, its role in estate planning, its contribution to long-term savings, and the factors that impact premium costs.

Benefits of Life Insurance

Life insurance serves as a safety net, ensuring that loved ones are financially protected in case of the policyholder’s demise. It guarantees that beneficiaries receive a lump sum payout, which can cover immediate expenses, replace lost income, and uphold the family’s quality of life. Families with young children find life insurance particularly valuable as it can provide for education and future needs, easing the financial burden during challenging times. Moreover, life insurance shields individuals from the strain of financial obligations, including mortgages and loans, ensuring that the family does not inherit these burdens.

Emotional Comfort

Life insurance brings more than just money – it brings peace of mind. When people have life insurance, they feel better knowing that their family will have financial help if something happens to them. This makes them less worried about what might happen in the future. Feeling less worried helps them live their current lives fully, without always thinking about what would happen to their family if they weren’t there anymore.

Different Kinds of Life Insurance

Life insurance comes in different flavors to match different needs. Some are like short-term helpers – they cover you for a certain time. Others, like lifelong guardians, protect you forever and also gather extra money over the years. There’s another type, too, called universal life insurance. This one mixes coverage with a way to save money, letting you build up a little fund. With all these choices, people can pick the one that fits their money goals and situation the best.

Role in Estate Planning

Life insurance plays a pivotal role in estate planning by ensuring a seamless transfer of wealth to beneficiaries. This proactive approach minimizes potential conflicts and legal complexities that can arise during inheritance. Additionally, life insurance payouts are generally exempt from inheritance taxes, making it an efficient strategy for passing on assets to the next generation with reduced tax implications.

Growing Your Money for the Future

Life insurance isn’t just about keeping you safe – it also helps you save and invest for a long time. With whole life and universal life policies, your money grows over the years. You can take out or borrow some of this money if you need it. This extra money can be a helpful backup during your retirement or unexpected situations, giving you more financial security on top of the money your loved ones get when you’re no longer here.

Factors Affecting Premiums

The cost of life insurance premiums is influenced by various factors. These include the policyholder’s age, health status, and lifestyle choices. Generally, younger and healthier individuals qualify for lower premiums. The coverage amount and the chosen policy type also impact costs. It is crucial for individuals to consider these factors while selecting a policy that suits their needs and financial capacity.

In conclusion, life insurance is an indispensable element of a comprehensive financial strategy. Its benefits encompass financial security for family members, coverage of debts, and peace of mind for policyholders. With a variety of policy types available, life insurance contributes to estate planning and long-term financial well-being. By understanding the factors that influence premium costs and making informed decisions, individuals can secure their family’s future and embrace life with enhanced confidence.

What Are The 5 Importnace Of Life Insurance – Exploring Its Role & Value

Life insurance might seem like a grown-up thing, but it’s actually important for everyone to know about. Here are five reasons why life insurance is a big deal:

1. Taking Care of Loved Ones:

Life insurance is like a promise you make to take care of your family even when you’re not around. If something happens to you, the insurance money can help your family with things like bills, school, and even just everyday needs. It’s a way to show that you’ll always look out for them.

2. Planning for the Unknown:

Life can be unpredictable. No one knows what tomorrow might bring. Life insurance helps you plan for the unknown. If something unexpected happens to you, your loved ones won’t have to struggle financially. It’s like having a safety net that catches you if you fall.

3. Covering Big Expenses:

Funerals and medical bills can be really expensive. Life insurance can help cover these big costs so that your family doesn’t have to worry about finding a lot of money quickly. It’s a way to ease their burden during a difficult time.

4. Passing On a Meaningful Gift:

Life insurance goes beyond finances; it’s a way to leave behind a meaningful legacy for your dear ones. By designating beneficiaries, you ensure that the insurance payout becomes a gift that keeps on giving. This support can empower your family to pursue their aspirations, educational goals, and future endeavors.

5. Peace of Mind:

Knowing that you have life insurance brings peace of mind. It’s like having a backup plan that ensures your family will be okay no matter what. This sense of security allows you to focus on living your life to the fullest without constantly worrying about the future.

In a nutshell, life insurance is a way to show that you care for your family even when you’re not there. It’s a tool that offers financial support, security, and a way to leave a positive impact on your loved ones. So, even though it might seem like something for adults, understanding the importance of life insurance is a wise step for everyone.

Argumentative Essay About Life Insurance

Life insurance, a contract between an individual and an insurance company, is a topic of paramount importance in personal finance discussions. It’s a widely debated issue with proponents asserting its crucial role in financial security, while skeptics question its necessity. This essay will argue that life insurance, despite its potential drawbacks, plays an indispensable role in securing one’s financial future.

The Positive Aspects of Life Insurance

Life insurance serves as a safety net, offering financial protection to beneficiaries during an emotionally challenging time. It replaces income, allowing families to maintain their standard of living even in the face of tragic life events. Furthermore, it can assist in mitigating debts and financial obligations, preventing families from inheriting burdensome liabilities. For estate planning, life insurance can minimize tax liabilities, preserving the value of the estate for the beneficiaries. Additionally, for entrepreneurs, a life insurance policy can ensure business continuity, covering losses and facilitating a seamless transition in the event of the owner’s demise.

Debate against life insurance

However, critics argue that life insurance isn’t always necessary, particularly for individuals without dependents. They contend that the premiums could be better invested elsewhere, yielding higher returns over time. Additionally, they point out that insurance companies often incorporate exclusions and complex terms, potentially resulting in denied claims. Critics thus advocate for careful consideration, only opting for life insurance when circumstances truly demand it.

Counterarguments and Challenges

However, it’s important to acknowledge the counterarguments. Critics argue that the cost of premiums may not justify the perceived benefits, especially for those with no dependents. The decision-making process can also be complex, with individuals grappling to choose the ideal policy that suits their needs. Furthermore, not everyone may need life insurance, particularly those with sufficient wealth or those without financial dependents.

Balancing the Scales

Despite these challenges, by assessing their unique circumstances, individuals can determine the necessity and extent of life insurance required. Consulting with financial advisors and incorporating life insurance into broader financial planning can lead to responsible decision-making.

In conclusion, while life insurance may not be a one-size-fits-all solution, it does serve as a crucial tool in securing the financial future of loved ones. It is a cornerstone of responsible financial planning and should be considered seriously depending on individual circumstances.

Hello! Welcome to my Blog StudyParagraphs.co. My name is Angelina. I am a college professor. I love reading writing for kids students. This blog is full with valuable knowledge for all class students. Thank you for reading my articles.

Related Posts:

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

• Search Search Please fill out this field.
• Life Insurance

Why Life Insurance Is Important

Why, When, and How Much You Should Get

How Life Insurance Works

• Why Buy It If You’re Young and Healthy

How Much Life Insurance Do You Need?

When you don’t need life insurance.

Thomas Barwick / Getty Images

While we might not like to think about death, it’s a reality for everybody. And sometimes, it comes too early, causing financial hardship in addition to emotional pain. Life insurance can help with the financial impact of death, but people often don’t understand how it works and how much it costs.

In many cases, life insurance is relatively inexpensive and provides crucial protection for loved ones.

Life insurance provides a large payment to beneficiaries when an insured person dies. The payout might be hundreds of thousands of dollars (or more), and that money is often free from federal income taxes. To get coverage, you submit an application, which typically involves answering health questions and may include a brief medical examination. Then, if approved, you pay premiums to a life insurance company in exchange for coverage.

Some forms of life insurance, such as guaranteed issue life insurance, do not require a medical exam or health questions.

Life insurance comes in several forms; you can categorize them broadly as term insurance and permanent, or cash value, insurance. Term insurance is the simplest and least expensive form of life insurance, and it’s an excellent choice for most families protecting themselves from the untimely death of a family member. With term insurance, you select a term (20 or 30 years, for example), and insurance coverage ends after that time.

Life insurance provides much-needed funding when tragedy strikes, and being underinsured can be extremely risky. Some of the most common reasons to have life insurance include the following.

To Protect Dependents

If a spouse, children, or other loved ones depend on you, there’s a good chance you need life insurance . If you’re a wage-earner in the family, your death would leave dependents without a vital source of income. The result could be a domino effect of financial hardships that last for years. This is because lost income makes it hard to save for goals like education, which can mean children enter the workforce with heavy student debt. It’s also much more difficult to save for retirement if a spouse or partner has to support a family on their own.

Even if a family member does not earn an income, their death can have significant financial consequences. For example, the loss of a caregiving parent might require that the surviving parent hire others for caregiving, spend more time on household duties, or quit working altogether.

To Pay for Funeral Costs

When somebody dies, there may be several expenses related to their death. In addition to any medical bills, you may incur final expenses, such as paying for a funeral, memorial, cremation, and more.

The national median cost of a funeral with burial is $7,640. If you choose cremation instead of burial, the cost is roughly $5,150.   That may be a substantial and unexpected bill for anybody coping with the loss of a loved one. Life insurance can help cover those costs and ensure that survivors arrange a memorial that’s meaningful for them.

To Pay Off Debts

Life insurance proceeds can pay off debts that might otherwise leave your loved ones in a difficult position. Being debt-free provides significant relief if the household income drops or expenses rise from caregiving needs. Even if you don’t have family members depending on you, anyone who co-signed a loan for you will be responsible for your debts. Life insurance can prevent their good deed from becoming a burden.

Paying off debt after death is complicated . Depending on state law and how you borrow, a surviving spouse might be responsible for your debt. Check with an attorney licensed in your state to learn what to expect after death and how to best prepare for it.

To Protect Your Business 

The death of a key employee or business owner can cause financial problems for your business, which is why many organizations use life insurance to manage risk. If the person who dies is responsible for business development, sales may fall sharply after their death. Or if you need to hire help quickly to fill a crucial role, you might need cash to pay recruiters, a signing bonus, and the first several months of salary.

Although key person life insurance is an expense for your business, it might not be deductible.   Speak with your CPA before making any decisions or counting on a deduction.

Why Buy Life Insurance if You’re Young and Healthy

If you’re not worried about dying—and nobody depends on you financially—it could still make sense to buy life insurance. The cost of insurance rises as you get older, so locking in a low rate can be beneficial.

The table below shows sample monthly premiums for a 20-year term insurance policy (assuming a nonsmoker with average health).   As you can see, the older you get, the more you pay for insurance.

Waiting can also be problematic if you develop health problems (or discover previously unknown issues) as you age. Insurance companies charge higher rates or deny coverage if you have certain conditions, so buying when you’re young and healthy can help you avoid those issues.

There’s no way to know exactly how much money survivors will need. One way to arrive at a reasonable estimate , is to determine which expenses your dependents will need to pay, and for how long.

Survivors need to pay for housing and food, among other expenses, and it’s nice to include a budget for “wants” as well as those needs. Ideally, the funds should also help loved ones save for financial goals like retirement or education costs. And it may be helpful to pay off debts (such as a home mortgage, auto loans, and student debt) or provide enough money to fund monthly payments for an extended period.

A simplified approach is to use a multiple of your salary. For example, you might buy a death benefit equal to 10 times your annual salary—and add $100,000 for each child’s education expenses. That method may ignore important issues, but it’s a popular way to estimate insurance needs, and it’s probably better than doing nothing.

Some people don’t need life insurance. If your death would not cause any level of financial hardship for anyone, you might not need coverage. For example, this could be the case if your children are grown and self-sufficient, and you have accumulated more than enough assets to provide for a surviving spouse and anyone else who depends on you.

Most people are not financially independent, however. If you have a family—especially a young or growing family—it’s smart to explore your options before ruling out life insurance. The risk of leaving anybody in a bind is too great, and the results can be devastating.

Key Takeaways

• Life insurance can provide a large payout when an insured person dies.
• Proceeds from life insurance are tax-free and can pay off debts, replace income, and cover final expenses.
• Life insurance costs are at their lowest when you’re young and healthy.
• It’s wise to consider who might suffer financially (and what resources might help them) after death.

National Funeral Directors Association. " NFDA General Price List Study Shows Funeral Costs Not Rising as Fast as Rate of Inflation ."

IRS. " Publication 535 (2019), Business Expenses ."

Term4Sale. " Term Life Insurance Quotes ."

Life Insurance: The Key Points Essay

An introduction to insurance, an internet source, a journal article on insurance needs.

The ultimate aim of Insurance is without a doubt to minimize the risks involved in various aspects of life and in addition to this, to cover and compensate the owner if any loss is suffered by the owner. Insurance may be taken to cover the risks involved in life, property and business. Mainly there are two types of insurance, namely, life insurance and general insurance. General insurance is all about covering fire and miscellaneous insurance. This type of insurance covers several things from burglary, theft, fidelity guarantee, livestock and crops, employer’s liability and lastly to insurance of motor vehicles. Insurance is a system of sharing risk and is responsible to pay the owner who suffers any kind of damage covered in the contract. Insurance is an ace card that compensates a person when everything is against the victim.

The term life assurance better known as life insurance is basically a contract between two parties, one is the policy owner and the other is the insurer. A very common term is the face amount; this is nothing but the initial amount which is paid by the insurer to the policy holder when the policy matures or in other words the policy reaches the time frame. Life insurance policy covers all the risks involved in a person’s life but it does not cover other risks like fire, damage of assets etc, to cover such risks there is another insurance called non life insurance, this type of insurance covers all the risks involved other than the risks involved to ones life. Non life insurance covers risks ranging from fire, health, house and other important things. There are many agents involved in the process of getting a secured life insurance policy; these agents form a link between the insurer and the policy holder.

“It’s best to establish clear parameters in your relationship with your insurance adviser. You should be clear about what your adviser can, and cannot, do for you. Discuss what you require for your business and make sure they are prepared to offer this level of service.” (Choose an Insurance Adviser and present your risk). It is always advisable to have an insurance policy to minimize the risks involved. The current period of recession has signaled the beginning of unprecedented situations and one must be geared up to face these risks. The most important step before getting a policy is to review the needs; according to the needs an insurance policy must be taken. The policy must compliment the needs and it should be in proportion to the needs of an individual. For instance, if a person opts to take vehicle insurance, if he sets a very high amount ignoring the other needs, this situation can be dangerous in the future so in order to secure the future to some extent proper insurance needs must be identified and an appropriate policy must be taken. There are several people involved in guiding the people who think they need an insurance policy, in the case of ambiguity, the people should not be reluctant to approach the other people who can guide them in order to accomplish this important task.

“Most consumers depend on their employer for their health, life and disability insurance. But according to a recent report by the Center for Economic and Policy Research, this year’s recession will cause at least 4.2 million people to lose their health and insurance coverage. If the worst happens and the recession costs you your job, what would you do? (Recession- Proof Your Insurance Needs).

Both the articles stress upon the need to purchase an insurance policy. An In-depth reading of the articles suggests that the recession period has brought countless uncertainties with it and it is always good to be on the safer side. The need to purchase a policy becomes even more considering the fact that the recession is supposed to continue for another year or two. This is a clear indication of the fact that the future is not looking rosy for the businessmen as well as the normal people hence it is very fair to say that an insurance policy is a must at this point. It is now or never. If it is never then the people who opt to do the same are going to pay a very heavy price for this mistake.

Insurance often confuses the people and most individuals tend to stay away from insuring themselves from the uncertainties of the future. Many individuals tend to invest in stock markets, mutual funds, real estate etc but ignoring the important need of insurance can be devastating in the future. The awareness among many individuals about insurance is very low and this is another reason why individuals tend to stay away from purchasing policies. When an individual is not aware of a product, that individual is expected to avoid the product and the very same applies in the case of insurance too. Both the sources focus on the very same topic which is insurance and it should be made a point to be aware of the needs and accordingly the price of the policy should be decided. This is very important and both the sources used in the paper insist upon the same. An individual has to decide between a life cover or an investment plan and both the sources have given a good account of this. It is always good to go in for life cover because each passing day is making the life even more challenging than earlier and it is highly advisable to ensure that one’s life is secured. Insurance advisers plays a pivotal role in deciding which policy must be adopted and both the sources emphasize on getting the right man to advice. It is quite difficult to get the right man as there is commission associated with the deals that these people earn so they try to sell the policy which would benefit them the most rather than benefiting the insurer. Hence it becomes imperative to get hold of the right man. Family members are usually very helpful when it comes to finding the right man; any relative having good contacts can be very helpful in getting the right man. The final part is conducting a review which is another important aspect, for instance if a person opts for a child’s education plan than that individual has to ensure that the policy selected is in accordance with the goal set for the education. Goal refers to the monetary goal. All these points have been mentioned in both the sources used in the paper. If all these points are extensively followed than an individual can have a secured future.

Choose an Insurance Adviser and present your risk. In Business.co. UK. 2009. Web.

Recession- Proof Your Insurance Needs. In Wall Street Journal. 2009. Web.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2021, December 7). Life Insurance: The Key Points. https://ivypanda.com/essays/life-insurance-the-key-points/

"Life Insurance: The Key Points." IvyPanda , 7 Dec. 2021, ivypanda.com/essays/life-insurance-the-key-points/.

IvyPanda . (2021) 'Life Insurance: The Key Points'. 7 December.

IvyPanda . 2021. "Life Insurance: The Key Points." December 7, 2021. https://ivypanda.com/essays/life-insurance-the-key-points/.

1. IvyPanda . "Life Insurance: The Key Points." December 7, 2021. https://ivypanda.com/essays/life-insurance-the-key-points/.

Bibliography

IvyPanda . "Life Insurance: The Key Points." December 7, 2021. https://ivypanda.com/essays/life-insurance-the-key-points/.

• Managing Risks for Those Working From Home and the Health: The Safety Adviser’s Point of View
• The Doctrine of Insurable Interest
• Workers’ Compensation: The Workmen’s Compensation Policy
• Introduction to Insurance
• In-house and Independent Agents
• Maximizing Share Holder Wealth
• Commercial Law: Insurance Contracts Act
• Australian Business Law: Insurance Contracts Act
• Laptop Holder Design
• Insurance and Negligence
• Home Run Services: Main Aspects of the Unique Company Focused On Services Relating to the Home
• The Flying Centre Airline's Business Plan
• Company Singapore Telecommunications (SingTel)
• Elderly Kit Business Plan for Dementia in the UAE
• Private Equity and Venture Capital Firm: The Explanation

Get your free personalized final expense life insurance quote.

• Life and Health

Importance of Life Insurance

In the event that you or your spouse pass away, will your family be financially protected? The cost of things like burial or cremation and funeral expenses as well as debt and day to day living costs can weigh heavily on families who have lost a loved one. Fortunately, life insurance can be there to help lessen the financial blow and help to provide coverage for these types of expenses, making the grieving process easier. When most people think of insurance, they most often think about health, car, and home insurance, but life insurance is not typically a form of insurance that people consider immediately. For older senior adults and people with children, life insurance is a good option to start thinking about. Even those who are younger and have young families can benefit from life insurance. It also covers you if you happen to die as a result of an accident or unexpected illness. There are several different types of life insurance policies, and some forms of life insurance cover more types of expenses than others or offer more money to the beneficiaries, so it is always important to consult with an agent and go over all of your options thoroughly before making a final decision on a policy.

Some of the things that life insurance covers include the heavy financial burden of burials or cremation and funeral services. Sadly, the costs for these types of services can be quite high, and can really take a financial toll on families who have lost a loved one. Without life insurance, these costs are usually left for the family to handle. Day to day living expenses like rent or mortgage payments as well as groceries and other bills are often covered in the form of a lump sum that is payable to the spouse or next of kin. This lump sum will allow your family to handle the costs of living without you. Another important thing to consider is the debt you may leave behind. Unpaid car notes and credit card debt is often passed on to the next of kin. A good life insurance policy should be able to cover these debts so that your family is not left with the heavy financial burden. Aside from these costs, the overall administrative costs that families incur upon the death of a family member can also be large. Attorney’s fees, funeral director fees, and the handling of your will and estate can all come at a price. Often, people do not consider this when they’re weighing the benefits of life insurance. A solid plan will help to pay for the administrative fees that are attached to this sort of thing.

There are several different levels or types of life insurance that people can choose from. Two of the main types are term life and permanent life insurance. Term life insurance offers what is known as death benefits to your family, which means they will receive compensation for things like funeral and cremation or burial, administrative costs and others. The reason this policy type is called term life insurance is because you choose a length of time, or term, that you want to be covered until. If you happen to live past that term and do not renew your policy, you and your family can lose out on the benefits. Permanent life insurance means that you and your loved ones are covered for an undetermined length of time, and the benefits are guaranteed no matter how long you live until. The premiums for permanent life insurance are much higher than term insurance for many reasons. First, this form of life insurance also serves as a form of investment that grows over time. Term life insurance is a flat rate and offers a flat dollar amount of benefits. Next, permanent life insurance costs more because it is long term and has more benefits.

No matter what kind of life insurance policy you choose, you will rest easy knowing that your family will be taken care of in the event of your passing. We never want to leave the ones we love behind financially or with any kind of extra burden. Having this kind of policy already in place will help to eliminate that worry and relieve some of the stress that comes with getting older or having children. The peace of mind that comes with having a life insurance policy already in place is priceless. Consider the type of policies available to you, and find out what types of deaths are covered such as illness or accident. In addition, be sure you know completely what the benefits are of the policy you decide on, so that your family will not be left to wonder what they will need to pay for when you are no longer with them. Talk with a representative who can go over all of your options with you in order to make sure you’re getting the best possible coverage available for you and your family.

Term vs. Whole Life Insurance

Term life insurance and whole life insurance are two common types of life insurance. Learn the difference and which may be best for you.

Life Insurance by State

Life insurance rules and plan availability may vary depending on the state you live in. Find your state and learn more!

Coverage Calculator

Determine how much life insurance coverage you may need with our simple life insurance calculator.

Ways to Use Life Insurance

Most life insurance policies allow you to use the payout any way you choose. Learn about more than 30 different ways now.

Questions to Ask Your Life Insurance Agent

You should consider asking your licensed life insurance agent these questions to help find the right plan for your coverage needs.

Life Insurance for Every Age

Learn more about your life insurance options and how your needs may change as you age.

Want to learn more about life insurance?

Join our email series today..

Thanks for signing up for our newsletter! Check your email to receive your free guide to life insurance!

Life Insurance: Theory and Practice

Life insurance can be defined as the contract between the insurer and the person who owns the policy. Some countries include some events like bills and death expenses are included in the premium policy. The insurer is bound to pay some money in case an event happens to occur.

If the insurer enters the contract, he pays an annual or monthly amount known as premium. If an event occurs, the benefit is paid to the beneficiaries. The insurance only considers the people who are included in the life policy. If any kind of event happens, the people who are insured are the only ones who are considered since it’s a contract between two parties, i.e., the policy owner and the insurer.

The only person allowed to pay for the policy is only the policy owner, and he also acts as the guarantee. They don’t consider the insurer as being a party to the contract since he acts as a participant. In life insurance, the insurer plays different roles compared to the roles of the policy owner. They sometimes seem to be the same, but they are totally different.

The owner appoints the beneficiary, although he is not entitled to the policy. If the beneficially happens to revoke the insurance contract, any changes that come along must be agreed upon by the beneficiary. This means that the owner has the right to change the beneficiary unless the beneficiary chooses to change or withdraw the policy. The changes might include cash value borrowing or policy assignments.

In life insurance, there are special requirements which are found in it. If the person commits suicide within a given period of time, this type of section is highly considered. If the application is misrepresented by the insured is considered as part of nullification. In most of the states in the US feel that the period of contestability cannot be more than two years.

The insurer will be considered to have a legal right to follow the claim relating to misrepresentation and ask additional information before denying the claim or accepting to pay only if the insured passes on within the mentioned period. In life insurance, the face amount on the policy is the one that the insurer is paid if he dies, and it’s still the original sum paid by the policy when the policy happens to mature.

In most cases, life insurance and life assurance always go together. In life, any of the events is most likely bound to happen. In life insurance, they are only events that are bound to happen e.g., floods, theft, the fire they come unexpectedly, causing a lot of damage. The events that are covered life assurance are events that one is sure they are going to happen in future e.g., death.

Types of insurance

Life assurance is basically divided into two categories, permanent and temporary.

(a) Temporary insurance is also known as term insurance; this type of life insurance does not accumulate cash value since it covers for a specified term of years and for a specified premium. The premium is termed as pure as it covers and buys protection in the events of death only. The only major areas which are considered in this term insurance are only the length of coverage, face amount which caters to protection or death benefits, and the premium which is going to be paid.

(b) Permanent; this type of insurance remains contact until the policy matures. If the owner is not in a position to pay the premiums on time, the policy becomes outdated or the policy lapses. The law defines that any type of policy cannot be canceled by the insurer for any reason, not unless signs of fraud are detected in the application. If there is any cancellation, there is a specific time given, which is normally two years. There are three types of permanent insurance;

(1) Whole life insurance; in this type of insurance, the cash value is included in the policy guaranteed by the company since they provide a level premium. The advantages of this insurance are that the whole life is guaranteed cash value, fixed and known annual premiums, and death benefits. We can also see that the disadvantages of whole life insurance are that the internal rate of return in the policy is usually not competitive with other savings. They also don’t have flexibility in their premiums.

(2) Endowments; endowments are considered to more expensive in terms of annual premiums compared with the rest of the insurance policies. Comparing with whole life or universal life, the period of the endowment is shortened, and it has earlier dates. In this policy, the cash value is built up inside the policy. The face amount has death benefits at a specific age. The age in which it starts is known as the endowment age. The endowment insurance is usually paid at a specific period e.g., 15 years or if the insured is living or dead.

(3) Universal life coverage; this is a new insurance cover which plans to offer a permanent insurance cover which has flexible premiums payments affordable for everyone with a quality higher internal rate of return. This insurance has a cash account, which is increased by the premium. The interest is paid within the policy, and it also recorded and credited at the rates decided by the company.

(4) Accidental death; this is limited insurance, and it only covers the insured when they pass away because of an accident. These accidents might be in the form of injury; they don’t cover any death that might occur due to health problems or any type of suicide. The policies are less expensive because they only cover death compared to other life insurances. The benefits are much better because they not only cover accidental death, but they also benefit those who have lost their limbs and also their bodily functions e.g., hearing and sight.

(5) Limited-pay; in this type of permanent insurance, all its premiums are paid over a specified duration of time. There are no extra premiums that are due to keep the policy in force.

When you come to look at life insurance, there are actually two main functions that make it operate fully. They include cash function and mortality function. In mortality function, the premium of everybody else covers the death benefits of anybody who die within a given period of time. In cash, function age varies, meaning that the policy matures and endows the face value of the policy depending on sate and company.

Time value of money

This concept refers to any type of interest that one happens to receive from any kind of payment. This is a present formula, which is the core formula for the time value of money. All the formulae are derived from the formula below;

The present value (PV) formula has four variables

PV value at time=0

FV value at time=n

I rate of compounding

N number of periods

Summing the contributions of FV the value of the cash flow, you will get the cumulative value.

The present value of growing perpetuity, if it grows at different fixed rates, you easily determine the value at looking at the following formula. There are various qualifications and modifications to this valuation application. It’s not easy to find a growing perpetual annuity with true perpetual cash flow or fixed rates.

When you want to calculate the value of the regular savings deposit in the future, you first calculate the present value of a stream of deposits of $1,000 every year for 20 years, earning an interest of 7%. (Steven A. Finkler, 1992)

Calculating the value at a duration of 20 years

This formula can be put together into a single formula.

Lester William Zartman, Life Insurance, 1914

Joseph Brotherton maclean, Life Insurance, 1962

Robert Irwin Mehr: Life Insurance: Theory and Practice, 1977

Solomon Stephen Huebner, George Lawrence Amrhein, Chester Alexander Kline, Life Insurance, 1935

Steven A. Finkler, Christina M. Graf, Budgeting Concepts for Nurse Managers, 1992

Jae K. Shim, Accounting and Finance for the Nonfinancial Executive: An Integrated, 2000

Cite this paper

• Chicago (N-B)
• Chicago (A-D)

StudyCorgi. (2020, January 6). Life Insurance: Theory and Practice. https://studycorgi.com/life-insurance-theory-and-practice/

"Life Insurance: Theory and Practice." StudyCorgi , 6 Jan. 2020, studycorgi.com/life-insurance-theory-and-practice/.

StudyCorgi . (2020) 'Life Insurance: Theory and Practice'. 6 January.

1. StudyCorgi . "Life Insurance: Theory and Practice." January 6, 2020. https://studycorgi.com/life-insurance-theory-and-practice/.

Bibliography

StudyCorgi . "Life Insurance: Theory and Practice." January 6, 2020. https://studycorgi.com/life-insurance-theory-and-practice/.

StudyCorgi . 2020. "Life Insurance: Theory and Practice." January 6, 2020. https://studycorgi.com/life-insurance-theory-and-practice/.

This paper, “Life Insurance: Theory and Practice”, was written and voluntary submitted to our free essay database by a straight-A student. Please ensure you properly reference the paper if you're using it to write your assignment.

Before publication, the StudyCorgi editorial team proofread and checked the paper to make sure it meets the highest standards in terms of grammar, punctuation, style, fact accuracy, copyright issues, and inclusive language. Last updated: January 6, 2020 .

If you are the author of this paper and no longer wish to have it published on StudyCorgi, request the removal . Please use the “ Donate your paper ” form to submit an essay.

• Publications
• HRS Bibliography

A Three Essay Examination of Life Insurance

Essays in Life Insurance

Files and links (1).

Cookie Preference Center

Your preferences, strictly necessary cookies.

As described in our Corporate Privacy Notice and Cookie Policy , we use cookies (including pixels or other similar technologies) on our websites, mobile applications and related products (the “services”). The types of cookies we use are described below.​

These are cookies necessary for the services to function and are always active. They are usually only set in response to actions made by the user which amount to a request for services, such as setting privacy preferences, logging in, or filling in forms. ​

Cookie List

Home — Essay Samples — Government & Politics — Insurance — Pros And Cons Of Life Insurance

Pros and Cons of Life Insurance

• Categories: Insurance

About this sample

Words: 1049 |

Published: Jul 7, 2022

Words: 1049 | Pages: 2 | 6 min read

Works Cited

• CarInsurance.com. (2021). Liability car insurance coverage.
• Insurance Information Institute. (2022). What is comprehensive insurance coverage?
• Investopedia. (2022). Life insurance.
• LongTermDisabilityInsurance.com. (n.d.). What is long-term disability insurance? https://www.longtermdisabilityinsurance.com/what-is-long-term-disability-insurance/
• Mayo Clinic. (2022). Health insurance: Understanding the basics. https://www.mayoclinic.org/healthy-lifestyle/consumer-health/in-depth/health-insurance-basics/art-20044166
• National Association of Insurance Commissioners. (2022). Homeowners insurance.
• National Association of Insurance Commissioners. (2022). Renters insurance.
• National Conference of State Legislatures. (2022). Auto insurance.
• Smith, D. (2021). Pros and cons of having insurance. The Balance. https://www.thebalance.com/pros-and-cons-of-having-insurance-4160775
• The Simple Dollar. (2022). What is long-term disability insurance?

Cite this Essay

Let us write you an essay from scratch

• 450+ experts on 30 subjects ready to help
• Custom essay delivered in as few as 3 hours

Get high-quality help

Prof Ernest (PhD)

Verified writer

• Expert in: Government & Politics

+ 120 experts online

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy . We’ll occasionally send you promo and account related email

No need to pay just yet!

Related Essays

2 pages / 844 words

5 pages / 2390 words

4 pages / 1977 words

2 pages / 927 words

Remember! This is just a sample.

You can get your custom paper by one of our expert writers.

121 writers online

Still can’t find what you need?

Browse our vast selection of original essay samples, each expertly formatted and styled

Related Essays on Insurance

Distinctive life insurance designs have been helping the friends and family to deal with their monetary duties on the off chance that the sole provider passes away. These designs have incredibly helped individuals to return to a [...]

In March 2018, the Supreme Court (sitting in a panel comprising Lord Mance, Lord Sumption, Lord Carnwath, Lord Hughes, Lord Briggs) will hear this appeal relating to the interpretation and interplay between clauses of the [...]

James Kunkle Sr. was Santa Ynez Valley pilot and a World War II veteran, his love, and dedication to his field of the job made a mark in history. When he was flying during World War II, there were no ejection seats in the [...]

The US car rental industry is currently dominated by the three major firms – Enterprise Holdings, Hertz and Avis. Enterprise Holdings in the largest of three, which revenue is nearly equal to the combined sales of Hertz [...]

Food miles are miles over which a food item is transported during the journey from producer to consumer, as a unit of measurement of the fuel used to transport it. The food miles’ concept, originating in the UK and given [...]

Present scenario of health insurance sector in India depicts that the cost of acquiring medical health has been scaled up enormously. Certain segments of the society remain in the state of affliction, whereas rest remains [...]

Related Topics

By clicking “Send”, you agree to our Terms of service and Privacy statement . We will occasionally send you account related emails.

Where do you want us to send this sample?

By clicking “Continue”, you agree to our terms of service and privacy policy.

Be careful. This essay is not unique

This essay was donated by a student and is likely to have been used and submitted before

Download this Sample

Free samples may contain mistakes and not unique parts

Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.

Please check your inbox.

We can write you a custom essay that will follow your exact instructions and meet the deadlines. Let's fix your grades together!

Get Your Personalized Essay in 3 Hours or Less!

We use cookies to personalyze your web-site experience. By continuing we’ll assume you board with our cookie policy .

• Instructions Followed To The Letter
• Deadlines Met At Every Stage
• Unique And Plagiarism Free

• Environment
• Information Science
• Social Issues
• Argumentative
• Cause and Effect
• Classification
• Compare and Contrast
• Descriptive
• Exemplification
• Informative
• Controversial
• Exploratory
• What Is an Essay
• Length of an Essay
• Generate Ideas
• Types of Essays
• Structuring an Essay
• Outline For Essay
• Essay Introduction
• Thesis Statement
• Body of an Essay
• Writing a Conclusion
• Essay Writing Tips
• Drafting an Essay
• Revision Process
• Fix a Broken Essay
• Format of an Essay
• Essay Examples
• Essay Checklist
• Essay Writing Service
• Pay for Research Paper
• Write My Research Paper
• Write My Essay
• Custom Essay Writing Service
• Admission Essay Writing Service
• Pay for Essay
• Academic Ghostwriting
• Write My Book Report
• Case Study Writing Service
• Dissertation Writing Service
• Coursework Writing Service
• Lab Report Writing Service
• Do My Assignment
• Buy College Papers
• Capstone Project Writing Service
• Buy Research Paper
• Custom Essays for Sale

Can’t find a perfect paper?

• Free Essay Samples

The Importance of Life Insurance

Updated 04 September 2023

Subject Illness ,  Personal Finance

Downloads 36

Category Health ,  Life

Topic Death ,  Life Insurance

Individuals in the society may perceive life insurance as a lifetime protection policy for only the elderly, but in essence, life insurance can apply to anyone as young as newborn to over the age of 100 years. Since tomorrow is never promised, life insurance is a recommendation to anyone over 18 years. Life insurance provides an individual with an opportunity to protect the future of their loved ones in an effect they pass away, for they will not have to worry about payment of expenses. There are two types of life insurances provided by insurance policymakers to individuals depending on their needs. They are; term insurance and whole life insurance.

Term insurance enables individuals to purchase an insurance policy for a specific period. Term insurance is applicable in situations where an individual can buy life protection they require when they are not able to buy a permanent life insurance policy. It is therefore advisable for parents to have insurance policies for all their children and adopted children. Thus, understanding the life insurance needed by the family is essential because situations may arise where a child who has life insurance cover passes away or get killed, where term insurance come to play in this case. A child can be given term insurance for a specific period, for an instant in their first ten years after birth; then the insurance policy s changed to whole life insurance from the age of 16 for instance. Changing the lie insurance policy to whole life is essential since I anything happens to the child after that, their future is taken care. For instance, if the child is killed at the age of 2 years, by that age, whole life insurance is operational, therefore, in a scenario where the deceased has a child, the future of the child is taken care of despite the absence of the parent.

Whole life insurance is for the best of the entire family. The importance of whole life insurance premiums is that it provides guaranteed protection during the life of the policyholder. Additionally, whole life insurance builds cash value provided the payment of premiums is well taken care of. Using the case of term insurance, switching to whole life insurance takes care of life after the demise of the initial holder. Therefore, it term insurance is used for the entire life of the policyholder, the insurance will be worthless if the individuals do not file claims during the term period of the insurance.

Harrison Family Case

From the information given, both spouses earn gross income. Emily who is an accountant makes a gross income of $120, 000 annually and Malcolm earns an approximate $150, 000 annually from his business, thus giving a total income of $270, 000 for the family annually. Harrison family has two children aged one and four each entitled to a daycare service amounting to $350 per week amounting to $700 per week for both children. Later when their children reach a school-going age, they will attend a local public school where the expenses related to children care will drop to $100 per week per child. The parents utilize $500 per month. According to t Harrison’s family, the children are expected to be dependent until they are 21 years of age upon which they will no longer be dependent. Thus, a fall to $2,000 per month of expenses is anticipated.

The family recently purchased a home valued at $650, 000 with a mortgage of $350,000. Credits card for both spouses totals to $18,000. The family will fund the children’s university education expected to be $35,000 per child. Emily has superannuation insurance worth $250,000, and Malcolm as well as the same insurance valued at $75,000.

Assumptions

Funeral costs will cost $10,000; Final medical costs $15,000; legal costs $5,000; required emergency funding $25,000; Investment rate per annum is 5%; and Spouses life expectancy is 82 years.

Term Life Cover Calculation

The least expensive type of insurance is term insurance. Term insurance is affordable as it can be purchased even when an individual is young. As an individual get older, the risks of dying increases exponentially. Term insurance is similar to other types of insurance covers as an individual pays premiums in an annual, semiannually or quarterly terms. Term insurance is as well used as temporary protection making it inexpensive. Additionally, it provides death protection where there is no cash value build up from the paid premiums. According to statistics, term life insurance policies usually lapse without the collection of death benefits.

As you get older, your risk of dying increases, so the cost of term insurance increases exponentially. As with most other insurance coverage, you pay premiums annually, semiannually, or quarterly for the term. For this premium, you receive a predetermined amount of life insurance protection. Term insurance is very inexpensive and is generally used for a temporary insurance need. However, it only provides for death protection, and there is no cash value built up from paid premiums. Statistics show that the majority of term policies expires without collection of death benefits.

Insurance provides benefits upon the death of a breadwinner in a family. Therefore, to determine how much is enough for the life insurance is of focus. A necessary approach that can be used to determine the amount is the needs approach which has replaced the human life value approach as the needs approach answers the question of how much is enough.

Needs Analysis Approach

Needs analysis approach focuses on daily expenses of the family until the end of life expectancy of the youngest member of the family. However, several factors are considered in the calculation of the amount needed. The elements are; available loans; marriage of the children; non-working spouse provision; education of the children; kind of family lifestyle; the number of dependents and their related needs; and any other special needs. Summing up all the expenses of what the family needs give a figure of what the family needs with an assumption that Malcolm and Emily die today. The life insurance and the assets are then deducted. The gap which remains is what Harrison family has to bridge.

According to the Harrison family, the following factors have to be considered for the calculation; available loans; education of the children; family lifestyle; the number of dependents; and special needs.

1. Sum up all the needs of the family insured upon death

Mortgage ($350,000) + children’s education university education ($60,000) + emergency funding ($25,000) + Funeral costs ($10,000) + Final medical costs ($15,000) + Legal costs ($5,000) = $465,000

2. Monthly income needs

Family expenses ($3,000 *12) + parent’s needs ($250 * 2) + children’s needs (220 * 2) + childcare before school age ($350 * 2) + childcare after-school age ($100 * 2) + dependent living expenses ($2,000) + credit cards ( $18,000) + superannuation insurance ( $325, 000)  = $382,840.

-Income of spouses ($270,000)

-Shortfall = Monthly income needs ($382, 840) – Income of spouses ($270,000) = $58,840).

-Income till children turns 21- $440 + $800 =$1240

Total= $712,920

3. Current invested assets 5% of  $270,000 = $13,500

Shortfall = $712,920 - $13,500 = $699,420

Multiple Analysis Approach

Multiple approach focuses on replacing income, payment for funeral and the final expenses and including the amount of debts payoffs like mortgages and university needs. The amount is then subtracted with the current assets and life insurance.

Funeral + income+ university needs + final expenses + mortgage + = $10,000 + $270,000 + $30,000 + $15,000 + $350,000 = $675,000

Subtracting from current investment + life insurance =5% of $270,000 + $325,000 = $388,500.

Therefore giving a shortfall of $675,000 - $388,500 = $286,500.

For the Harrison family to assure its life insurance policy, they must cover a total of $286,500 as shortfall relating to one and half years of income salary.

The best type of insurance approach for Harrison’s family is needs analysis approach as it takes into consideration the needs of the family about daily operations and the future of the children both before and after school age. For Harrison’s family, adopting a cash value insurance which is whole life insurance which provides death benefits as the value increase as long as the family funds the policy (Gold, 2014). Additionally, cash value insurance is in assistance when dealing with obligations to do with taxation while paying for business, retirement or university fees. However, the insurance policy is expensive but can be advantages if Harrison’s family commits to funding the plan regularly.

Gold, J. (2014, September 24). 5 Most Common Mistakes People Make with Life Insurance. Retrieved from www.huffingtonpost.com: https://www.huffingtonpost.com/jacob-gold/five-most-common-mistakes_b_5877652.html

Deadline is approaching?

Wait no more. Let us write you an essay from scratch

Related Essays

Related topics.

Find Out the Cost of Your Paper

Type your email

By clicking “Submit”, you agree to our Terms of Use and Privacy policy. Sometimes you will receive account related emails.

The College Study

Essay, Letter , Paragrah , Aplication

Essay on the Importance of Insurance

“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.

[the_ad id=”17141″]Thirdly, the insured person can get loans against the security of the insurance policy from the insurance company or from banks.

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.

[ PDF Download ]

Leave a reply cancel reply.

Your email address will not be published. Required fields are marked *

Notify me of follow-up comments by email.

Notify me of new posts by email.