5 Main Functions of Insurance

Not infrequently, the awareness of the importance of having insurance is still underestimated. In fact, if you know more about insurance, then the benefits or functions of insurance can be felt in the future.

Not only for those who do not have insurance, for the insurance policyholders were still quite a lot who still lay about the main function of this protection guarantee.

So, for you who do not have insurance, there is no harm in knowing what the main function of this insurance so you do not regret in the future. And even if you already hold an insurance card, then you will be really grateful to have proposed insurance before.

Here are 5 main functions of insurance that you should know, namely:

 

1. Insurance Can Shift Risk

Function of Insurance. Car insurance. Compensation of your vehicle can be paid by Insurance

Anyone would not want to experience an unpleasant event. However, no one can escape when disaster comes. Thus, the risks of the accident must be diverse and have different impacts, and are often related to finance.

If you are an insurance customer, then you have the right of risk transfer, so you can make a claim or get compensation if it is in difficult conditions or experiencing adverse events.

This is where the function of the premium will be obvious, whether the premium you pay is really useful or not at all. Therefore, it is important for potential customers to choose insurance by calculating or understanding illustrations of an insurance.

So, by having insurance, then a number of risks that may just happen to you can be distracted by the existing insurance in the insurance product. That is, losses that may arise due to something, can be covered by the insurance you have.

If it is so, then anyone will feel calm and comfortable because it is protected from various risks from the occurrence of undesirable possibility.

 

2. Insurance Can As Investment

Insurance Investment. Insurance can serve as an investment

Do not underestimate the insurance. In addition to its functions that can transfer the risk, insurance can also be a means of investment. Therefore, the funds collected from the customer will be developed by the insurance. Because not a few also, the insurance can be taken at a certain time because there was no claim at all before.

Well, this can provide more benefits to insurance customers, right? Even the funds developed by the insurance can also save the cost of premiums every month. So, in addition to feeling safe and comfortable because it feels protected, in the end you can take the funds collected from the premium paid every month.

 

3. Premium Balance Guarantee Paid with Protection

Function of Insurance. Between premiums paid with appropriate protection

Another function of insurance is to provide a balance between premiums paid with the protection that will be provided if the customer suffers an adverse event. That is, customers will be given compensation is balanced or in accordance with the premium you pay each month.

Any risk that occurs will be calculated with the premium you paid. The liability of the insurance will vary with each customer of course. This is because every customer also pays a premium with a different amount according to his financial ability.

So, if you pay a lower premium, then cannot get the same coverage with customers who pay higher premiums every month. In addition, health and age conditions, or conditions and types of goods/property, also affect insurance premium price premiums.

For example, if you become an insurance customer at the age of 27 years, then the premium price can be cheaper. This is because you are still in the category of productive age and minimal health problems than those aged 40 years and over. And customers who are over 40 years old, will pay a premium that is much more expensive because of a lot of risk of health problems.

 

4. Insurance Works Protecting Bankruptcy Risk

Function of Insurance. Insolvent Insurance. The quieter the business by having insurance

There are many types of insurance available, depending on the need. Not just for health or education category, insurance is also available for business protection. That is, for you pioneering entrepreneur (startup entrepreneur), you can follow the insurance for this business.

In general, startup business will experience more up and down in running its business, and this is where the function of insurance will be seen. This insurance can prevent the occurrence of bankruptcy in a businessman, whether they are just starting a business or a long time.

Nature of insurance itself can protect customers and raise customer funds or called investment. When you have invested money through premiums paid every month, you will certainly get a good income and can be a right protection for your business.

 

5. Insurance Can Help Improvement of National Economy

Function of Insurance. Society. Economic growth is good, people live prosperously

Did you know that insurance also has a contribution to the national economy? With the improvement of economic growth, the standard of living of the people will also be better. Well, if you already have insurance, then you also have a role to promote the domestic economy and the results you can also enjoy.

Understand Its Function and Take Advantage of Insurance

And for you function of insurer. Well, by looking at the function of the existence of this insurance, then obviously the benefits that we can get in the future. So, if there is a question how important to have insurance? The answer is definitely very important. Because of the insurance as a means of protection that can be obtained in urgent and unexpected conditions at any time, as well as profit at the end of the period following the insurance. So, there is a guarantee in your own life as well as beloved family. So, take advantage of more insurance benefits and do not regret in the future.


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