In the insurance, the liability may or may not occur. In the Life insurance, the pay should be based on the maturity of time period or the death of insured. Insurance provides dual benefit of savings and security. Insurance is becoming an integral part of the human and business life. The advantages of insurance are:
There are always fear of sudden and unexpected loss in the business and human life. If fire accident occurs in the company, it will cause loss to the business. That type of sudden losses will be covered by the insurance. In human life also, if bread bringing person dies in the family, insurance will provides money to that family.
A large number of persons obtain insurance policies and pay premium to the insurer. When a loss occurs, it is compensated out of money of the insurer. Insurance covers the uncertain risk in the life.
Source of collecting funds:
Insurance collects funds through the premiums. The premium will be paid in installments. Large funds are collected by premiums.
Insurance provides not only security but also provides savings. The insurer saves the money the paying premiums. At the time of maturity of policy, the insured gets bulk amount of money.
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