Insurance is a Special Type of Contract. there are two parties one party is the 'insured' and another party is the 'insurer'. In this Contract, the insurer undertakes to compensate the insured for the loss arising from the risk insured against. Functions of Insurance may be divided into three categories namely - Primary Functions, Secondary Functions, and other functions. Primary Functions of Insurance are discussed in the previous Post. Here in this post, we are going to discuss Secondary functions of Insurance.
Primary Functions of Insurance (In short)
In primary functions of Insurance, Protection is one of the important function. Insurance is to provide protection against future risk. There are many other Primary Functions which are Important functions of Insurance See here...Primary Functions of Insurance.
Secondary Functions of Insurance
Secondary Functions of Insurance Are as follows -
1. 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.
2. 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.
3. 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. It is one of the important source of investment. Insurance gives Confidence in the general public.
Primary Functions of Insurance
Indirect Functions of Insurance