The basic role of insurance is to safeguard the best interest of people from any uncertainty. Through the purchase of insurance policies, the insured get security through payment of any given contingency that is included within the insurance coverage of the insured. There are actually different types of insurance. The importance of insurance depends on how people want to have protective assurance on their best interest. Basically, having insurance provides the insured peace of mind. Here is a list on some of the importance of insurance:
- Security – the safety and security that insurance provides against loss towards any particular event can never be underestimated. To have security on the things or people that you hold dear can be beneficial, especially when you encounter losses over these things. Life insurance can be a helpful financial protection for your family if you, the breadwinner, encounter any fatal accidents. On the other hand, fire insurance gives financial protection over the property should it accidentally get destroyed through fire damage.
- Reduced Business Risk or Losses – when you have a business where properties and employees are being handled, any slight negligence can turn profit into waste. Additionally, having loss of life involving any accidents that can happen within the business area can lead to tremendous loss of finances. Having the necessary insurance policy can help to reduce financial losses from such occurrences and therefore reduce any risk to the business.
- Peace of Mind – when you know that your best interests are insured, you no longer have to fear losing them to things that are covered by your insurance policies. For example, you have a business with which you fear losing through fire situations. Having fire insurance for the said business or even property will certainly reduce your worry of losing your business from fire as your insurer will cover the cost of any finances that has been lost in the business you have adequately secured insurance for.
- Improves Credit – any person who is getting some type of loan will not be able to get any loan without being properly insured. This type of insurance is not only in the best interest of the person getting a loan, but also of the bank or lending company that is providing the loan. In any worst case scenario such as death, the insurance of the insured will be utilized in settling the loan.