Introduction of Insurance

Human beings are exposed to a number of uncertain events, which are known as risks. It is impossible to eliminate these risks but a person can reduce the financial losses arising from such uncertain events with the help of insurance. In face, the greatest challenge for each and every business is the risk and uncertainty of financial losses. Such uncertainty may arise due to fire, theft,
bulgary, accident, flood and earthquake.  These risks and uncertainty are considered as the threats of the businesses. These threats discourage for the promotion of business. Insurance is the way of minimizing and reducing the financial losses arising from such threats, risks and uncertainties. Hence, the insurance can rightly be regarded as the most effective tool for the expansion and development of industry and trade.

·         Meaning and Definition:

       Insurance is a way, which provides security to the man and his property against the risk and uncertainty. It is the means of shifting the risks to insurer in the consideration of a nominal cost called premium. Insurance promises to indemnify the losses in return for a financial consideration called premium paid by insured.  Thus, insurance is a contract of indemnifying the losses occurred due to any sort of risk, in consideration of the premium. It provides financial protection against any specific risk of a person and business.

         Insurance can be defined as a co-operative device of spreading the losses. Such losses occur due to a particular risk which is spread over to number of persons who are exposed to the risk and agree to insure themselves against the risk. Insurance can neither eliminate nor decrease the risk. It only provides financial protection against such risk. The co-operative device by which risks are disturbed among a large number of persons who are exposed to such risks is basically termed as insurance. Under this plan, the losses due to uncertain events are compensated. It provides security against the losses to a man and his property. Hence, insurance is a contract of providing financial protection against the losses occurred due to a particular risk in consideration of the premium. Insurance is a contract of spreading over a risk among a large number of persons. It provides security against the financial losses to a man and his properties. It is a method of indemnifying financial loss occurred due to a particular risk in consideration of premium.

          No illness, accident or death should lead any family to any financial problem. Therefore, not to ruin the finance of family with such problem and to help such families financially, the word insurance and its concept is termed which probably helps in future. Our savings in the name of insurance will definitely be very important and useful in near future. Hence, insurance is a scientific method of co-operating individuals who are exposed to risks and to ensure our future.