Wednesday, November 5, 2014


Human life and properties are surrounded by full of uncertainities created by people.The  risk of human life has been increasing over the year because of developments in science and technology.The uncertainities which create losses are known as risks.Human risks are classified into financial and non-financial risk can't be measured in monetary value.The job of over coming the risk is done by insurance companies.Insurance policy or insurance is an agreement made between two parties in which one promises the other to compensate the loss due to fire,death,theft,accident or other factors.Insurance relieves from uncertainties or risks.Insurance requires involvement of two parties i.e insurer and insured.Insurer is the insurance company who agrees to take the risk and to compensate the loss against payment of premium and Insurer is aperson or organization who desires to insure his life or property against certain risks. Insurance policy can neither eliminate nor remove all risks.But it saves business from great financial losses.

Insurance is in the stage after crossing of different stages.There is no evidential proof about the exact time of origin of insurance in the world.The insurance service was also in practice in ancient time but it was of different way.Evidence in the record of insurance shows that the traditional insurance existed even before 400 BC.There is no evidence about the existence of insurance before 12th century.The contribution of modern marine insurance goes to Edward Lloyd,he used to publish insurance news regularly.He developed the concept of registration and renewal of marine insurance at his home.Nowadays,there is chanceof loss in every step.Risk involves the losses.Insurance is a tool which reduces the cost of loss or effect of loss caused  by different risks.Insurance is essential to human beings to spread out the losses cause due to natural calamities or any other reasons.It minimizes risk of loss in business.So,it promises trade,industry and commerce leading to economic development of the nation.Insurance protects against the financial loss by providing financial security to dependent or insured.It protects for loss of our own life and property from various incidents and accidents.It provides financial protection against any losses which creates confidence in the people.It removes fear,tension,risk etc in future and performs his activities peacefully.Insurance encourages the businessman to operate his business even in large scale because insurance make sure of his earning because the insurance company will pay a fixed amount at the time of death,damaged by fire,theft etc.It also helps in economic development of the country by providing favourable environment to industries,trade and services.Insurance company collects capital through premium and issuing shares and debentures.Insurance company pays different types of taxes to government out of their profit and it also helps to increase government revenue.Insurance utililzes the collected fund which helps to develop trade and industry.And the remaining amount of capital is realeased as loan to small,medium and large-scale business and industries.It helps to increase revenue,reduce inflation,employment opportunities.Insurance helps in increment of employment opportunities,it increase their income and improve living standard.Insurance promotes business by minimizing risk/loss.It helps to increase in production and decrease in impact of inflation.It also tries to control the over circulation of money.

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