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considered as a proper alternative. The only viable alternative therefore is insurance.
It is a product of individual’s farsightedness, his present sacrifice for a future gain. It
is commensurate with his self respect and dignity.
In case of a house burnt due to an accidental fire, he does not have to go to other
members of the society begging help. Insurance thus creates a society of proud
people who know how to take care of themselves even during difficult times.
Insurance is thus a tool of social security par excellence.
Role of Insurance in the development of economy :
From very rudimentary beginnings, the concept of insurance has travelled a long
distance as to become an effective engine for the development of economy. The
present day economy, it is said, would be unthinkable without the business of
insurance. Factories and industries in the modern days involve investment of
thousand of crores. Aeroplanes costing hundreds of crores of rupees fly in the sky.
The ships of today cost a fortune.
Each one of them face the risk of damage to total destruction for reasons beyond
one's control. If the owner is always to be worried of their possible loss due to some
such reasons, would he be able to sleep in peace? Would he turn into a maniac
worrying as to what is going to happen to him if this asset is lost? Insurance provides
that peace of mind, freedom from worries, confidence to take risk which alone drives
the economy forward.
Today’s economy, it is said, is a credit economy. The businessmen, the factory
owner, even the ordinary serviceholder takes loan to provide for himself capital, to
purchase goods, to start a factory, to purchase a house, or conveyance even a
Copyright Dr Rakesh Agarwal Sashi Publications Private Limited
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