Life Insurance is Key to Development of Any Economy

Introduction

The world we live in is full of instability and risk. Individuals, families, companies, property and assets are exposed to different types and levels of risk. These include risk of loss of life, health, assets and property, etc. While it is not always possible to prevent unwanted events from occurring, the financial world has evolved into making products that protect individuals and businesses from these losses by compensating them with financial resources. Insurance is a financial product that reduces substantially or eliminates the cost of loss or the impact of loss caused by various types of risk. Regardless of the protection of individuals and companies from many types of potential risks, the insurance sector contributes very significantly to the general economic growth of the nation, mainly by providing stability for the work of companies and generating long-term financial resources for industrial projects. Among other things, the insurance sector also promotes the savings between individuals and generates jobs for millions, especially in a country like India, where savings and employment are important.

Element

It is a way to confront the risks that a person is exposed to in his being or his money during his life in order to mitigate its risks. The goal of this medium is the cooperation that is achieved with the participation of persons at risk in facing the effects that result from achieving it for some of them, by paying each of them for a contribution or installment, and the collected amounts are collected and then distributed to the people who suffer the disaster. In this way, the effects of the disaster will be achieved on those involved in this cooperation. Let’s understand in detail how and why Insurance as a sector is key to development of any economy. Human life in all its forms has boundless social and economic value. Since ancient times, humans have tried many systems to preserve prosperity in the face of adversity and prosperity. In modern times, life insurance is one of these financial arrangements that provide social and economic security for individuals and societies. (1)

Insurance provides financial support and reduces the uncertainty faced by individuals and companies at every stage of their lives. It provides ideal servicesto mitigate risks against events that could cause a financial problem for individuals and companies. For example, with medical inflation growing at 15%, for example, annually, even simple medical procedures cost enough to break a well-calculated family budget, but health insurance will ensure family financial security. In the case of commercial insurance, financial compensation is provided for the financial loss due to theft, fire, accidents related to marine activities, other accidents, etc.

The insurance sector greatly affects the general economy by mobilizing domestic savings. Insurance converts accumulated capital into productive investments. Insurance also reduces losses and financial stability and supports trade and commercial activities that lead to sustainable economic growth and development. Thus, insurance plays a major role in economic growth.

Insurance facilitates the transfer of the insured's risk to the insurance company. The basic principle of insurance is to spread the risk among a large number of people. A large population gets insurance services and pays a premium to the insurance company. When a loss occurs, it is compensated from the pool of funds raised from millions of policyholders. (2)

The main function of risk management is to ensure an optimal relationship with risk and return through a variety of available risk management methods. Risk retention usually complements the transfer of risk to insurance, and this type of hedging is applicable in cases where the risk potential and severity of negative penalties are small. Commercial insurance means the insurance of companies such as (producers, distributors, commercial companies and wholesaling) and other companies. (3)

What Are Term Insurance Plans?

Term Insurance plans are the simplest and most helpful form of life insurance.

Term insurance plans are life insurance plans that promise to pay a benefit only if the insured dies during the insurance period. Usually there is no entitlement or entitlement under the plan. Therefore, separation plans are called pure protection plans. (4)

Development of supervision and control of insurance funds the historical development of insurance funds in Egypt:

Private insurance funds or aid funds are considered a type of mutual or cooperative insurance company, which is known as fraternity associations in many countries. Egypt has known brotherhood societies thousands of years ago, when ancient Egyptians formed societies to face the costs of burying the dead, and historical documents indicate that since more than 4,500 years BC, the ancient Egyptians established insurance societies that pay certain amounts to their members upon death. Romanians have similar societies that perform almost the same purpose, during the era of the Roman Empire there were also societies that give the heirs certain amounts of money upon the death of any of its members. Private insurance funds in Egypt are deemed a translation on the ground of the principle of social solidarity between workers in their work entities and it is noted that their work is minor on people insurance mainly. (5)

What Are My Rights From Insurance Companies?

Treatment with credibility: Insurance companies must deal reliably by fulfilling their financial and legal obligations in accordance with the relevant laws and regulations, and provide special services to their clients, especially low-income, elderly, and people with special needs, from both sexes.

Non-discrimination: Insurance services and products must be provided to insurance company clients without distinction as to race, sex, or religion.

To keep customer information confidential: Protecting customer financial, personal and insurance information and using it for specific professional purposes with the consent of the client, and not to disclose that information to any other party without prior permission from the institution except the relevant authorities.

There are many rights that make a person to contract with insurance companies because they have many advantages that make a person tend to contract.

Conclusion

Insurance is a way to face the risks to which a person or his money is exposed during his life in order to alleviate its impact. The essence of this method is the cooperation that is achieved with the participation of persons at risk in facing the effects that result from its realization with respect to some of them, by paying each of them for a contribution or a share, and the collected amounts are collected and then distributed to the people who suffer the disaster. In this way, the effects of the disaster will be achieved on those involved in this cooperation. Insurance is a practical reality, and it is one of the best means that enables a person to mitigate the effects of disasters, whether these disasters occurred by the person himself, with his negligence or negligence, or by the action of others. It is a means of safety that matches the spirit of the modern era.

Reference

1. Mishra, Kaninika. www.amazon.com.  https://www.amazon.com/Fundamentals-Life-Insurance-Theories-Applications/dp/8120352661.
2. A.Green, Michelle. www.books.google.com. https://books.google.com.eg/books?id=I337CAAAQBAJ&pg=PA213&lpg=PA213&dq=the+importance+of+insurance+in+real+life+book&source=bl&ots=ptOQtajnGQ&sig=ACfU3U3urAmjn5nsPf4DdqRUt6wJ9IKNhA&hl=ar&sa=X&ved=2ahUKEwi2o9n79uDpAhVHLBoKHYorCmMQ6AEwD3oECAoQAQ#v=onepage&.
3. Njegomir, Vladimir.  July 2015. https://www.researchgate.net/publication/312214563_The_Role_and_Importance_of_Insurance_of_Business_and_Supply_Chain_Interruptions.
4. wealth, Economic times. 12 March 2020. https://economictimes.indiatimes.com/wealth/insure/advantage-of-term-insurance-over-other-types-of-life-insurance/articleshow/67955148.cms.
5. Financial Supervisory Authority, Insurance Sector. http://www.fra.gov.eg/jtags/Insurance/Insurance.html.