FUNCTIONS AND BENEFITS OF INSURANCE

FUNCTIONS AND BENEFITS OF INSURANCE
Insurance has many functions and benefits, some of which we may describe as

primary and others as ancillary or secondary, as follows: (a) Primary functions/benefits: Insurance is essentially a risk transfer mechanism,removing, for a premium, the potential financial loss from the individual andplacingit upon the insurer.The primary benefit is seen in the financial compensation made available toinsured victims of the various insured events. On the commercial side, thisenables businesses to survive major fires, liabilities, etc. From a personal point ofview, the money is of great help in times of tragedy (life insurance) or other timesof need.(b) Ancillary functions/benefits:more...