Chapte

r3
Role and
Importan
ce of
Insurance
3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

Role and Importance of

Insurance

3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

Uses to Individual
Insurance provides Security and
Safety;
Against the loss on a particular
event.
Against premature death and old
age are adequately provided by
insurance.
Against loss on a property by fire is
insured by fire insurance.
against the loss of damage,
Prepared by: Abdullah Al Yousuf
3/27/15 destruction or disappearance of
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Khan - CBA

Uses to Individual
Insurance provides peace of mind;
The mental state of security provides
a source of motivation to work more.
The security reduces the fear of loss
on fire, accident, damage, and death.
Although insurance does not banish
the uncertainty of any event that may
occur.

3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

Uses to Individual
Insurance Protects Mortgage
Property;
Insurance provides adequate amount
to the dependents at the early death
of the property- owner to pay off the
unpaid loans.
In the event of a damage of the
mortgage property, the insurance
provides adequate amount for the
repair.
3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

Uses to Individual
Insurance Eliminates Dependency;
In the event of a death of the head of the
family as the main earner or at the
destruction of any property, the family would
suffer a lot financially and emotionally.
Sudden death in the family or damage of any
property will reduce the standard of living,
and sufferings may go to any extent of
begging from the relative, friends or
neighbors.
Insurance provides adequate amount at the
time of sufferings.
3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

Uses to Individual
Life Insurance Encourage Savings;
Life insurance provides protection and
investments whereas property insurance
provides protection only.
A compulsory premiums leads to savings
for the regular payments.
The premiums cannot be withdrawn.
the insurer will pay the policy amount for
the damage irrespective of the premiums.
No payments of premiums is subject to
cancellation of the insurance.
3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

Uses to Individual
Life Insurance Provides Profitable
Investments;
Endowment policies, multipurpose
policies, deferred annuities are some
complex but profitable investments
alternatives managed by the insurance
company that are unfamiliar to the
individuals.
An individual from his/her own capacity
cannot invest regularly with enough
security and profitability.
3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

Uses to Individual
Life Insurance Fulfills the Needs
of a Person;
Family needs
Old-age needs
Re-adjustment needs
Special needs
Education
Marriage
Settlement

The clean-up needs

3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

Uses to Business
Reduction in Uncertainty of
Business Loss;
In business, huge number of
property/assets are employed and a
slight negligence may turn these
properties into ashes.
Due to the nature of uncertainty for
such losses, nobody would like to
invest a huge amount in business
and industry.
by: Abdullah Al Yousuf
Insurance Prepared
3/27/15
10
provides
with the
Khan - CBA

Questions
Describe in details the importance of
insurance.
What are its uses to the business
community?
What are its uses to the society?
What are its uses to an individual?
Insurance is able to reduce inflation,
so it should be made mandatory,
comment.
3/27/15

Prepared by: Abdullah Al Yousuf

Khan - CBA

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