Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. … The amount of money charged by the insurer to the policyholder for the coverage set forth in the insurance policy is called the premium.

What is the role of insurance?

Insurance generates significant impact on the economy by mobilizing domestic savings. … Insurance enables to mitigate loss, financial stability and promotes trade and commerce activities those results into economic growth and development. Thus, insurance plays a crucial role in sustainable growth of an economy.

What are the advantages of insurance?

Explain any five advantages of insurance.Insurance provides economic protection to the insured. It provides financial protection to the insured against the unexpected losses in consideration of nominal amount called premium. It provides financial protection to the dependent in case of pre-matured death of insured.

Why insurance is needed?

You need insurance to protect your life, your ability to earn income, and to keep a roof over your head. As you evaluate the potential gaps in your insurance coverage, consider which policies you may want to include your short- and long-term financial plan.

What is the benefit of insurance?

Insurance makes it unnecessary to set aside a large amount of money to pay for the financial consequences of the risk exposures that can be insured. This allows that money to be used more efficiently. Another uncommon, important benefit of insurance is support for the insured’s credit.

What is the main purpose of insurance?

Insurance is a contract in which an insurer promises to pay the insured party a sum of money if one or more specified events occur in the future, in return for regular small payments – known as premiums. The purpose of insurance is to reduce your business’ exposure to the effects of particular risks.

What kinds of insurance do I need?

Read on to find out more about nine common types of insurance you may want to consider buying.

  • Health insurance. Health insurance is the single most important type of insurance you’ll ever buy. …
  • Dental insurance. …
  • Disability insurance. …
  • Life insurance. …
  • Pet insurance. …
  • Homeowners or renters insurance. …
  • Flood insurance. …
  • Car insurance.

What are the 3 types of car insurance?

There are three primary types of coverage offered by the majority of car insurance providers. They include liability, collision, and comprehensive.

How do I get car insurance?Here’s how to do it:

  1. Decide how you want to buy car insurance.
  2. Decide how much car insurance coverage you need.
  3. Fill out an application for car insurance quotes.
  4. Get your quotes.
  5. Vet your quotes.
  6. Pick a car insurance company and get insured.
  7. Cancel your old policy.