Ten Benefits of Conventional Insurance - Insurance Pedia (IP)

Ten Benefits of Conventional Insurance

Insurance needs are increasingly needed in everyday life, both individuals, and the business world. Then the insurance has many benefits, among others as follows: (Darmawi: 2000: 4)

1. Insurance protects investment risk

The ability to assume risk is a fundamental element in a free economy. When a company seeks to gain an advantage in its business field, the presence of uncertainty risks is inevitable.

2. Insurance as a source of investment funds

Economic development requires a sufficient amount of investment support that its implementation should be based on its own capabilities. Insurance companies are able to collect funds (in the form of insurance premiums) in an amount that is not small. Reinvestment of these funds is a source of significant capital in accelerating the pace of economic development.

3. Insurance to complete the credit terms

Creditors are more confident in companies that risk their business activities are insured. The lender is not only interested in the company’s current state and wealth, but also the extent to which it has protected itself from unexpected events in the future. The way to obtain such protection is by having an insurance policy.

4. Insurance can alleviate concerns

Insurance companies do not have the power to prevent unexpected losses. The main function of insurance is to reduce concerns due to uncertainty. Thus, insurance companies do not reduce the uncertainty of unexpected deviations.

5. Insurance reduces the cost of capital

In order to withdraw capital into companies that bear substantial costs, then the returns on the capital invested or to be invested must be considerable. The level of risk and return on capital are related to each other and can not be separated.

6. Insurance guarantees the stability of the company

Today’s companies recognize the importance of insurance as one of the factors that creates goodwill between the group of leaders and employees. These companies have provided a group policy for certain employees by means of companies paying for the whole or part of the established organs.

7. Insurance can flatten the profits in a competitive business world, losses incurred by future hazards may not be counted as one component of cost of goods sold. By trying to determine the “chance” costs that may be experienced in the future through the insurance program, the company will consider or calculate such costs as an element of total cost for production to be sold.

8. Insurance can provide professional services

Insurance world today is increasingly moving in the field of business that is technical, especially with the rapid development in the field of technology. Efforts to provide technical assistance to both individuals and companies are done so that these companies can perform their operations properly and efficiently.

9. Insurance encourages business prevention losses

Today insurance companies do a lot of businesses that encourage companies depend on to protect themselves from harm that can cause losses. Companies that operate in various business fields realize the protection of cooperation with insurance companies can eliminate or minimize kemungkingan which can cause harm.

10. Insurance helps health maintenance

Other businesses that are closely related to the efforts undertaken to avoid or minimize the cause of loss is a campaign by the life insurance company to the policyholders in particular and the general public at large.