Benefits of Insurance to Society

Insurance indemnifies the losses. It contributes greatly to family and business stability. Due to this, employees continue to remain in their job, suppliers continue to receive orders, and consumers continue to get goods and services. Insurance companies collect premiums. Insurance companies are engaged in a variety of loss prevention programs. Society benefits since both direct and indirect losses are reduced by such activities. Insurance also serves many other important economic and societal functions. Because of insurance, banks can grant loans with the assurance that the loan’s collateral is covered against damage. Collateral is the property that can be taken as payment if a loan goes unpaid. This increased availability of credit helps people buy homes and cars.