10 Benefits of Insurance are listed and carefully explained one by one in this article for your perusal.
The patronage of insurance companies is very low compared to the patronage of commercial banks in Nigeria. This could be because people have little or no idea about the benefits of insurance. Hence, this article will explain in detail the benefits of insurance.
1. Insurance can cover unnecessary uncertainties
One of the major aims of insurance is to ensure that all (or most) uncertainties are covered. These uncertainties may be presented in the form of losses or unexpected occurrences.
For instance, a car incident is not a predictable occurrence, hence, when the worst happens according to the terms and conditions guarding the insurance of that item, the insurance company can cover up everything or part of the losses. This makes the insurer safe and secure.
2. It guards against any financial fluctuation
Life can be very unpredictable when it comes to monetary terms. It is quite painful for an individual to spend if not all his or her savings solving an unpredicted event that was never planned for and this can be very discouraging.
As such the benefit of insurance is necessary as it helps to maintain any stability in your finances. It also assists in bearing the financial burden or sharing the financial burden between the insured and the insurer.
3. There is provision of economic and futuristic protection
Insurance does not just establish a policy for the present only but it gives and maintains policies for the future. These policies can serve as economic and futuristic protection. Also in cases where there is an economic boom (shocks) or surplus, the individual is protected against any unexpected losses that may affect your economic activities in the future.
4. It helps to maintain the standard of living
Insurance gives an individual the capacity to maintain their per capita income despite all odds. Many businesses could have been in a state of no existence and this could have caused them to lay off their staff thereby raising the employment rate in that nation but the insurance company manages such a state by ensuring that all protective measures are taken to maintain the standard of living.
5. It grants and loans to trusted persons
The insurance has the right to issue grants/loans to corporate bodies. The financial regulatory agencies ensure this right. This indicates natural disasters one can simply obtain loans from any insurance company but terms and conditions are applied.
6. Insurance protects you and your family against natural disasters
Natural disasters are tragedies that occur without the reaction of man. These include floods, and fires caused by lightning, among others.
Insurance creates a policy that guides the insured against any loss that is not contributed or caused by humans. Most people have had to lose their means of livelihood and shelter due to flood or fire. The benefit of insurance here is to protect such people against losses caused by natural disasters.
7. There is a greater degree of assurance
Any item insured gives the insured a level of confidence. For insurance in a business setting, the owner of the business is bound to bear risk and could be afraid of some factors that could cause uncertainties in the business. When a business is insured, the future is guaranteed against unexpected loss of prosperity and other assets.
8. It is recognized by governmental authorities
Some government policies recommend that an item should be insured. This indicates that insurance is not just a business set up to make a profit but it is highly recognized by governmental authorities.
9. Minimizes the level of dependency
Instead of a business relying so much on borrowing it should become more responsible through insurance. Most of the borrowing platforms get the business more indebted with increasing interest rates such that if they fail to make repayment, the business will shut down (if not immediately) and become non-operational
10. Tax benefits
Insurance sets a base such that certain policies can have tax relief that the insured can benefit.
Read Also: Business Insurance Benefits – 10 Benefits
Life is unpredictable and such a third party that serves as a guide through tough times is needed. The benefit of insurance is to cover up all negatives such that your burden is transferable to the insurer.