The benefits of insurance.
Insurance is a system of spreading the losses of an individual over a group of individuals. Insurance is a plan by which large number of people associate themselves and transfer the risks of an individual to the shoulders of all. It is contract between the insurer and the insured where the insurer pays certain sum of money on the death or expiry of certain period. It is regarded as the most popular method to meet business risks. Insurance provides a numerous benefits to the businessmen.
- It helps in reducing the uncertainty of business risks.
- It increases the efficiency of the business because the chances of occurrence of loss will affect the efficiency adversely.
- Insurance serve as a key-man indemnification. Key-man provides a most valuable asset to the business and its absence will reduce the income of the employer.
- It facilitate business continuation and makes the business to enjoy the status of a perpetual existence.
- It helps in promoting the welfare of the employees.