Importance of insurance

Economic security is the most sought after assurance of well being in the modern age of technology. An effective instrument of ensuring security is Insurance-may it be the security of dependants of the bread-winner or it may be the security of goods lost by natural, accidental or circumstantial mishaps.
As man developed his arsenal of weaponry for the protection of his body, he also developed means of economic and financial protection. It emerged in the shape of life and non-life insurance.
The subject of life insurance is the human being and the object is to provide financial security, to the dependants of the deceased, while the subject of non-life or general insurance encompasses everything from a pin to a jumbo jet, all goods and property - with the object of putting a person back in the same financial position of the loss as he was at the occurrence of the loss. It would, thus be seen that insurance is the most effective equipment to protect oneself against the horrendous effects of personal or property loss due to disastrous events.
The desire of all people has always been, and will always remain, to live a cleaner, healthier, comfortable and easy life. To fulfill this basic need of human beings, enterprises produce and provide goods and services and, in the process, make innovations and inventions.
When you make innovations and inventions, you take big risks. An onerous responsibility devolves on the shoulders of innovators and inventors and, while doing this, they play with the lives of people. A small error or lapse can cause numerous side effects which may result in the death or disability of a large number.
The notorious case of Union Carbide, commonly known as Bhopal tragedy, in India occurred in 1984, when poisonous gas escaped from the plant, killing 3,300 people and injuring 200,000. The Supreme Court of India settled this claim for an amount of US $470 million.
These types of instances speak of the importance of insurance. Had insurance not been at the back of all these innovators, the world would never have progressed in all walks of our lives. Once this insecurity factor was taken care of, the entrepreneur started looking for new and more sophisticated machines, robots and gadgets.
Atomic energy was harnessed for the progress of man. Booster rockets put the man on the moon. Computers enabled man to acquire answers to the most complicated problems in minutes for which an army of experts took days to solve. Deep seas were exploited and bowels of the earth were torn apart fearlessly to extract wealth for the progress of man.
Concords and Jumbo jets were developed and the world shrank to a small size. Medical sciences made tremendous advances and most of the hydra headed diseases, dreaded by man from times immemorial, have been eradicated, expanding man's life expectancy. All this happened because of insurance support.
In all spheres of a man's life, insurance is there to help and assist him, be it motor insurance, or fire or life or any other class of insurance. The helping hand of insurance is always there to protect and provide him financial security.
Insurance is also an effective tool for mobilisation of savings which helps both in the control of inflation and in capital formation for the development of the country. Thus, it plays a pivotal role in the economic progress of a country.
In peace time, the coffers of insurance are open to trade and industry which eventually contributes towards the progress of man. Insurance is a great source of revenue to the national exchequer.
In short, "Insurance is among the most leading forces contributing towards economic, social and technological progress of man". In other words, progress of insurance is linked with the progress of man.
During war, insurance plays its leading role as no other economic activity can. Life insurance finances war efforts, marine insurance provides funds for new ships whenever these vessels are sunk, while fire insurance makes good the losses sustained due to fire as a result of bombing.
Without insurance cover all industrial, economic and social activity of the world will come to a grinding halt. Major trade and commercial contracts will be abandoned, airplanes grounded, and vehicular traffic withdrawn from roads. There will be an utter chaos.
This shows that insurance is a synonym of human progress, prosperity and civilisation.