Definition and Benefits of Insurance

In risk management products, insurance is a mechanism that can divert the risks that might befall the insured to the insurer or the insurance party. This risk transfer is carried out by the payment of claims given by the insurer to the insured party who gets a loss from an event or an insured situation.

Insurance can not stop the risks that may befall you and your family and your assets. However, this type of service is able to reduce or reduce the impact of losses arising from a risk. This makes insurance increasingly popular in the present because everyone does not want excessive worry about the possibility of losing from the risks that lurk.

Proof of risk transfer from the insurer to the insured listed in the insurance policy issued by the insurance party to the insured who has fulfilled the obligation to pay the premium. In insurance, there are three elements that serve as the main guidelines for the insured risk reduction mechanism as follows.

Insurance Benefits You Must Know

The insurance benefits below are in fact very useful for the insured who pays the premium.

1. Presenting Security

The risk exposure certainly raises concerns that have never been resolved. If this is the case, it is not impossible that your days will be full of anxiety about an uncertain problem. Insurance provides a sense of security to deal with all that so that you can concentrate more on activities and developing yourself. Your life will be calmer because you feel protected.

2. Giving Certainty

From uncertain risks, you can get assurance from insurance. That is, you can already estimate the costs or financial consequences of the risks that can arise at any time with a relatively certain value.

3. Savings and Investment

In certain types, there are insurance facilities that have a cash value if they are not used or there are no claims. Such types are called whole life or endowment. Even now, there is insurance combined with investment known as unit link. Of these types, insurance can not only reduce risk on yourself and your assets, but also can be a means of saving and investing tools.

4. Minimizing the Risk of Losses

According to its main function as a risk diversion, insurance can of course make the potential loss that you can experience from certain risks to a minimum. This is what makes insurance known as a risk reduction.

5. Improving Business Activities

Imagine if your place of business suddenly breaks down or the assets in it disappear. Of course you have to provide large funds to replace it so that the business continues. With insurance, losses from this can be borne by the insurers so that existing funds can be used to increase your business activities.

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