Questions Personal and Family

What is the role of insurance in the economic development?


Shivani Mehul

Be the exception

Buying Insurance plans is one of the most significant ways to give proper protection to life as well as to the properties. 

Different types of insurance policies are now available in the market. The insurance policies can give directions as well as indirect benefits to the individual. These insurance plans are carefully designed to provide its real benefit to the economic development of the nation.  Other than giving protection to human life insurance plays a vital role in economic development too. The insurance firms are playing a very responsible position in economic growth. Economic development is full of risk, and so when a business needs to plan for expansion, it requires the support of insurance protection.

The role of insurance towards economic developments:

  • Insurance shows its essential part of the nation’s economic growth via risk management. Entrepreneurs, as well as small business owners, can keep a check on the exposure by buying insurance policies, designed to give protection against any crime, liability lawsuits, damages, or natural disasters which can cause severe damage to the business. 
  • Insurance policies are designed to give proper protection to capital assets. Whether it is residential property or properties related to business, all will get the necessary protection on the selection of the right insurance policies. This will also be helpful for better expansion of the business and further development in the industry.  Insurance covers three essential steps: Real savings, the act of investment and enhancement in employment.
  • Insurance helps in encouraging investment by highlighting financial stability as well as by mobilizing savings. The accumulation of the income made by the funds used by customers towards buying life insurance plans, sources capital which can get invested somewhere else for economic needs by the firms for getting higher returns.
  • Personal, as well as social insurance policies, plays a vital role in economic development of the nation by supporting workers to stay healthy, to deliver jobs in a better way and take up more important and critical assignments.
  • Insurance firms, especially the life insurers offer a wide range of insurance products which are covering various needs of children, women as well as for aged people under the social security network.  This helps in reducing the burden of Govt. exchequer towards providing such services.

The above points indicated as of how insurance policies or better to say insurance firms are showing their responsibility towards economic development of the nation.  Seeking the advice of the professional experts of the insurance industry, you will get an idea as to what others ways insurance can support the economy of a country. 

Also read: What is commercial insurance coverage?

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