Insurance is a contract, there are two parties one party is the 'insured' and other party is the 'insurer'. The elementary purpose of insurance is to provide protection against future risk, accident, and uncertainty. Functions of Insurance may be divided into three categories namely - 1 Primary Functions, 2.Secondary Functions, 3.Other functions or Indirect Functions.
   

Meaning and Definition of Insurance


      Insurance is a contract between the insurer and insured under which the insurer undertakes to compensate the insured for the loss arising from the risk insured against. In simple words, Insurance is a contract in which one party (the insurer), for a consideration (the premium),  assumes a particular risk of the other party(the insured) and promises to pay to the other party or his beneficiary, a certain or ascertainable sum of amount on the happening of specified contingency against which the insurance is asked for.

Some Important Definitions of Insurance - 

Ghosh and Agarwal -  According to Ghosh and Agarwal," Insurance is a Co-operative form of distributing a certain risk over a group of persons who are exposed to it"

John Megi - According to John Megi, "Insurance is a plan wherein persons collectively share the losses of risk"

Encyclopaedia Britannica -  According to Encyclopaedia Britannica, " Insurance may be defined as a  social device whereby a large group of individuals,  through a system of equitable contributions, may reduce or eliminate the measurable risk of economic loss common to all member of the group"

Functions of Insurance - 


According to According to Sir William Beveridge, functions of Insurance may be divided into three categories namely -

1 Primary Functions

2.Secondary Functions

3.Other functions or Indirect Functions.

1) Primary functions of Insurance


Primary Functions of Insurance are as follows -

(a) Provide protection -

   The most important function of insurance is to provide protection against future risk, accident, and uncertainty.It is one check the reality of the misfortune happening and pays the cost of damages of losses.

(b) Ensure Certainty -

      No one knows what will happen next, the future is uncertain. Any misfortune happening may occur at any stage of life the amount of loss and time of losses both are uncertain. Insurance is a device which helps change uncertainty into certainty. Insurance provides certainty of payment for the uncertain loss.

(c) Evaluate Risk -

     In our daily life we anticipate various kinds of unforeseen risks and therefore the loss arising from such risks is also unpredictable. Insurance fixes the likely volume of a risk and by assessing diverse factors that give rise to risk. According to Layman "Insurance is a guard against pecuniary loss arising on the happening of unforeseen event and a device to share the Loss".


(d) Distribution of risk / Collective Risk Sharing  -

  Insurance is it wise to share the financial loss. It is a cooperative effort where the risk is distributed among the group of People. Thus, no one have to bear the losses occurred due to uncertainty.

2) Secondary Functions of Insurance

 
Secondary Functions of Insurance Are as follows -

(a) Insurance Prevent Losses - 

      Insurance plays important role in preventing losses, it provides certainty and prevent losses.  Insurance provides certainties towards risks in entrepreneurship so that entrepreneurs canconcentrate on Innovative and profitable techniques of the production.

(b) Provides Capital and Help in Economic Progress -

     As we know insurance plays important role in human life. Insurance helps in Economic Progress of Insured. It provides capital and helps in commercial prosperity.  It develops the trade and commerce of the nation.

(c) Ensure Welfare of Society - 

     Insurance serves the sociological purpose, Insurance indirectly helps Nation and contribute its progress. Insurance provides security and minimizes worries of losses or damage, destruction, and death. It helps in commercial prosperity. It develops the trade and commerce of the nation.  Insurance gives Confidence in the general public.

3) Other Functions / Indirect functions of insurance -


Other Functions or Indirect functions of Insurance are as follows -

1. Saving and Investment -  

      It is one of the important source of investment.In India,  One more important thing is that in India, Income Tax Act gives relief in payment of income tax. It encourages the habit of savings among the people. In India, Life Insurance is also a method of Savings.


2. Risk-Free Trade -

            As above mentioned insurance provides certainty and provides protection for future loss or damage. It provides Indemnity in the event of unexpected loss or damages or disaster.  Insurance boosts exports, making foreign trade risk free with the help of the different type of Policy under marine insurance cover


3. Medium of Earning Foreign Exchange - 

         In international business, Any Country can earn foreign exchange by way of issue of marine insurance policies. There are some other ways also available. In India, it is Compulsory to take Marine Insurance Policy in foreign trade.


See also...

Kinds/ Types of Insurance

Types of Marine Insurance Policies | Insurance Law

Establishment, Constitution and Capital of the Life Insurance Corporation of India



79 comments:

  1. Good notes . more help for us

    ReplyDelete
  2. Hello, this weekend is good for me, since this time i am reading this enormous informative article here at my home.finances

    ReplyDelete
  3. Pretty good post. I have just stumbled upon your blog and enjoyed reading your blog posts very much. best car insurance company in pakistan | united travel insurance

    ReplyDelete
  4. This is my first time i visit here. I found so many interesting stuff in your blog especially its discussion. From the tons of comments on your articles, I guess I am not the only one having all the enjoyment here keep up the good work loss adjuster

    ReplyDelete
  5. I can set up my new idea from this post. It gives in depth information. Thanks for this valuable information for all,.. dewa poker

    ReplyDelete
  6. Incredible tips and straightforward. This will be exceptionally helpful for me when I get an opportunity to begin my blog. dewa poker

    ReplyDelete
  7. Acknowledges for paper such a beneficial composition, I stumbled beside your blog besides decipher a limited announce. I want your technique of inscription. nagapoker

    ReplyDelete
  8. You made such an interesting piece to read, giving every subject enlightenment for us to gain knowledge. Thanks for sharing the such information with us to read this... 저신용 대출

    ReplyDelete
  9. Choiceseniorinsurance.com provides insurance policy for seniorswithout any physical examination. They provide burial insurance policy for the final expense.

    ReplyDelete
  10. I am continually amazed by the amount of information available on this subject.What you presented was well researched and well worded in order to get your stand on this across to all your readers. agen judi bola 88

    ReplyDelete
  11. Acknowledges for paper such a beneficial composition, I stumbled beside your blog besides decipher a limited announce. I want your technique of inscription... Lapsi Recipe

    ReplyDelete
  12. Nice to be visiting your blog again, it has been months for me. Well this article that i've been waited for so long. I need this article to complete my assignment in the college, and it has same topic with your article. Thanks, great share. rivalqq


    ReplyDelete
  13. Your article has piqued a lot of positive interest.I can see why since you have done such a good job of making it interesting. joker123 daftar

    ReplyDelete
  14. This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information. Keep it up. Keep blogging. Looking to reading your next post.Poker Online

    ReplyDelete
  15. This is what we call soothing and The blog is like a portal of feelings.
    Compare Car Insurance UK

    ReplyDelete
  16. Great info! I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have. เกมไพ่ป๊อกเด้ง

    ReplyDelete
  17. The data you have posted is extremely valuable. The locales you have alluded was great. Much obliged for sharing.. how to get cheaper taxi insurance

    ReplyDelete
  18. Just admiring your work and wondering how you managed this blog so well. It’s so remarkable that I can't afford to not go through this valuable information whenever I surf the internet! immigration process

    ReplyDelete
  19. Just admiring your work and wondering how you managed this blog so well. It’s so remarkable that I can't afford to not go through this valuable information whenever I surf the internet! immigration process

    ReplyDelete
  20. you want to know if you are overpaying for home insurance, and if you are, you want to know if you have access to a more affordable insurer. We can help you connect with a live insurance broker who will give you the information you need to insure your house. agen asuransi allianz

    ReplyDelete
  21. These websites are really needed, you can learn a lot. insurance games

    ReplyDelete
  22. Pretty nice post. I just stumbled upon your weblog and wanted to say that I have really enjoyed browsing your blog posts. After all I’ll be subscribing to your feed and I hope you write again soon!Cosmetic Surgery

    ReplyDelete
  23. Taxi To Gatwick
    Gatwick Airport Transfers Gatwick is the second largest international airport in London.

    ReplyDelete
  24. We've arranged elite of terms and their definitions to all the more likely assist you with exploring the occasionally befuddling universe of insurance. www.besteuitvaartverzekering.com/

    ReplyDelete
  25. leather bags look really nice specially those natural leather bags, ‘ visit this web-site

    ReplyDelete
  26. I can set up my new idea from this post. It gives in depth information. Thanks for this valuable information for all,.. medical credentialling

    ReplyDelete
  27. I felt exceptionally cheerful while perusing this site. This was truly extremely instructive site for me. I truly enjoyed it. This was truly a sincere post. Much obliged!. Buy Vape Carts Online

    ReplyDelete
  28. An agreement of Insurance appears when an individual looking for insurance security goes into an agreement with the guarantor to repay him against loss of property by or accidental to fire and additionally easing up, blast, and so on This is essentially an agreement and consequently as is administered by the overall law of agreement. CPO in Missouri & Kansas

    ReplyDelete
  29. I have a similar interest this is my page read everything carefully and let me know what you think. ancillary products

    ReplyDelete
  30. I really loved reading your blog. It was very well authored and easy to undertand. Unlike additional blogs I have read which are really not tht good. I also found your posts very interesting. In fact after reading, I had to go show it to my friend and he ejoyed it as well! credentialing service

    ReplyDelete
  31. Wow what a Great Information about World Day its very nice informative post. thanks for the post. Instant Payday Loans

    ReplyDelete
  32. We are really grateful for your blog post. You will find a lot of approaches after visiting your post. Great work unlockyourbravado.com

    ReplyDelete
  33. Thanks for the nice blog. It was very useful for me. I'm happy I found this blog. Thank you for sharing with us,I too always learn something new from your post. Kanados viza

    ReplyDelete
  34. Hi, I find reading this article a joy. It is extremely helpful and interesting and very much looking forward to reading more of your work. top ias coaching in Mumbai

    ReplyDelete
  35. This is actually the kind of information I have been trying to find. Thank you for writing this information. Aesthetic machine

    ReplyDelete
  36. This is very nice post. Thank you for making the post. I hope you will post more beautiful ones upfront.Mdmonirul Islam

    ReplyDelete
  37. Besides doing research, try to look for discounts or other fringe benefits offered as well. cheap auto insurance az

    ReplyDelete
  38. I like the valuable info in your articles. I'll bookmark your blog and check again here regularly. I'll learn plenty of new stuff right here! Best of luck for the next! Regards
    best laptop in bangladesh

    ReplyDelete
  39. Incredible tips and straightforward. This will be exceptionally helpful for me when I get an opportunity to begin my blog. international trade

    ReplyDelete
  40. I don t have the time at the moment to fully read your site but I have bookmarked it and also add your RSS feeds. I will be back in a day or two. thanks for a great site. international trade

    ReplyDelete
  41. I have recently started a blog, the info you provide on this site has helped me greatly. Thanks for all of your time & work. click here

    ReplyDelete
  42. Clean website. Do you ever accept guest posts? I am maintaining a site on my latest hobby water filters and wanting to trade some content with good sites. I looked around your blog and you’ve got some good content and I was thinking our readers would both find value. Thanks! Homepage

    ReplyDelete
  43. Keep up the work, great job! The Azerbaijan government has introduced an online visa system that allows UK citizens to obtain a visit visa electronically. Azerbaijan visa for UK citizens, UK citizens can now easily apply for Azerbaijan visa from their home or office.

    ReplyDelete
  44. This comment has been removed by the author.

    ReplyDelete
  45. This comment has been removed by the author.

    ReplyDelete
  46. This comment has been removed by the author.

    ReplyDelete
  47. wow, great, I was wondering how to cure acne naturally. and found your site by google, learned a lot, now i’m a bit clear. I’ve bookmark your site and also add rss. keep us updated. bike

    ReplyDelete
  48. Your article has piqued a lot of positive interest.I can see why since you have done such a good job of making it interesting. stafalagu.net

    ReplyDelete
  49. This content is simply exciting and creative. I have been deciding on a institutional move and this has helped me with one aspect. Camelback Mountain ski resort men's weekend

    ReplyDelete
  50. You have done a great job. I will definitely dig it and personally recommend to my friends. I am confident they will be benefited from this site. discovery

    ReplyDelete
  51. I don t have the time at the moment to fully read your site but I have bookmarked it and also add your RSS feeds. I will be back in a day or two. thanks for a great site.

    freelancing

    ReplyDelete
  52. Wow! Such an amazing and helpful post this is. I really really love it. It's so good and so awesome. I am just amazed. I hope that you continue to do your work like this in the future also. nokia

    ReplyDelete
  53. However, if it records that you frequently drive late at night or you drive fast, then it would not help you save money with your car insurance. Insurance Partnership

    ReplyDelete
  54. If you keep an eye on the market, crypto trading can be profitable for you. However, you may find it hard at times. Fortunately, if you need assistance, you can give a go to crypto signal services.  Best cryptocurrency insurance company

    ReplyDelete

  55. Buy laptop at Lowest price guaranteed in Bangladesh
    All popular Laptop brands including Macbook, HP,
    Asus, Dell, Lenovo, MSI, and Xiaomi are available
    Visit Star Tech Laptop Shop or Order online to get delivery anywhere in BD. Laptop

    ReplyDelete
  56. Acknowledges for paper such a beneficial composition, I stumbled beside your blog besides decipher a limited announce. I want your technique of inscription. k86sport

    ReplyDelete
  57. Thank you so much for share such a wonderful information and ideas. The author clearly describe all the parts of the article and we can easily understand each and every information. Quality articles is the vital to welcome the clients to pay visit the webpage, that’s what this site is giving. quick fund capital

    ReplyDelete
  58. You have done a great job. I will definitely dig it and personally recommend to my friends. I am confident they will be benefited from this site. greenhouses for indoor plants

    ReplyDelete
  59. I like the valuable info in your articles. I'll bookmark your blog and check again here regularly.
    I'll learn plenty of new stuff right here! Best of luck for the next! Regards.
    Moving to Idaho

    ReplyDelete
  60. Nice to be visiting your blog again, it has been months for me. Well this article that i've been waited for so long. 의왕출장마사지

    ReplyDelete
  61. Thank you for another great article. Where else could anyone get that kind of information in such a perfect way of writing? I have a presentation next week, and I am on the look for such information. computer

    ReplyDelete
  62. What you'll learn
    Discussions on all units of Ethics GS paper 4 will make you comfortable on the subject matter.
    Understand the gravity of Ethical behaviour in public services in a developing country like India. Also how our day to day actions and their consequences impact significant others.
    Learning about eminent administrators who have contributed towards making India a robust nation and have truly upheld the spirit of Civil Services.
    Values which make governance not only possible but also acceptable in a country so diverse and where expectations of the citizens are rising continuously.

    Psychological concepts of Attitude and Emotional Intelligence and how they contribute in making us a better person. Also nuances about persuasion and social influence which are integral part of policy implementation.
    Understand how some important theories of moral thinkers advanced our understanding of Ethics and how they are relevant for the exam.
    Last but not the least , Case study based approach and skills of answer writing as without these success in Civil Services remains a far fetched dream.
    Answer writing in Ethics assumes importance as it is different from other papers of GS. In Ethics , quote based questions and Case Studies are marks fetching areas. Sir’s approach is to discuss answer writing skills so that you can get command on it.
    Visit Ethics Course For UPSC

    ReplyDelete
  63. This comment has been removed by the author.

    ReplyDelete
  64. hei there thank u for information for this valuable information for all slot hei89<\a>

    ReplyDelete
  65. Thank you so much for share such a wonderful information and ideas toto<\a>

    ReplyDelete
  66. Situs togel online paling gacor dimuka bumi hanya GigaToto

    ReplyDelete
  67. Sangat senang karena Giga Toto selalu memberikan yang terbaik

    ReplyDelete
  68. Rekomendasi Bandar togel terpercaya hanya di Togel Barat

    ReplyDelete
  69. Master Lotre trusted slot online agency in Indonesia today

    ReplyDelete
  70. Slot online solution and play only Giga Toto now and get bonuses and rewards.

    ReplyDelete


  71. How Does Snapchat Work
    How Does Snapchat Work
    Your web log isn’t only useful but it is additionally really creative too.

    ReplyDelete
  72. Bermain Togel Resmi dan beragam pasaran togel yang tersedia saat ini.

    ReplyDelete
  73. Feel free powerfull biolink and shortlink another Heylink

    ReplyDelete

See Also..