Benefits of General Insurance
There are various benefits for opting general insurance. The benefits include:
- Financial security of valuables: General insurance protects us from financial loss arising due to some unforeseen events, which may destroy the value of our assets, thus providing financial security.
- Encourages Saving: Since an insurance policy works through the payment of regular premiums, it encourages saving habit among the policyholders.
- Spreading the risk: Insurance facilitates the spreading of risk among a large number of individuals, by collecting premiums from these people and paying claims out of these funds.
- Flexibility: General Insurance is flexible because the insurer can choose any policy, with different terms and conditions, coverage, benefits, duration etc.
- Tax Benefit: Businesses and professionals can claim the premium paid towards general insurance as an expense, provided that the insurance is directly or indirectly related to their business/profession and is not just a personal expenditure.
- Promotes economic growth: By assuring businesses that in unforeseen losses, the insurance company will bear them, insurance promotes investments by reducing the fear of loss.
- Generates financial resources: The premiums collected are invested by the insurance company into high-interest yielding securities, leading to the generation of financial resources.
