BENEFITS/IMPORTANCE OF INSURANCE

 1. It allows individuals and business people to save money that would be used to cover unexpected emergencies.

2. An entrepreneur is assured of business continuity as a result of the compensation after the loss has occurred. This gives the entrepreneur confidence, stable earnings, growing and expansion.

3. Customers increase their trust in the entrepreneur’s business as a result of the assurance in his or her business continuity.

4. The property of the business people are guarded against all risks like fire, theft, e.t.c. This gives confidence to entrepreneurs to undertake business operations.

5. Insurance companies act as trustees and referees to their clients who would like to get loans from commercial banks.

6. Insurance companies also give loans to business men who operate on large scale and have collateral security. The excess premium which is not spent on daily expenses of the company and investments can be lent out to earn interest for the insurance company.

7. Insurance policy (contract/document) is used as security when applying for bank loans. Banks usually prefer security that is insured because they guarantee loan repayment.

8. It promotes international trade because entrepreneurs are able to import and export their goods. The entrepreneurs are also able to insure their goods against numerous risks in foreign trade.

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