Page 28 - M1_Insurance Introduction Notes

Insurance companies collect premiums to provide for

this protection and losses are paid out of the premiums

so collected from the insuring public. In other words,

an insurance contract promises to make good to the

insured by paying a certain sum in consideration for

the premium received from the insured.

Importance of insurance

Insurance is important in various aspects:

1. Individual Aspects – Individual Security, encourage

the habit of forced saving, provides mental peace,

increases efficiency, contributes to the

conservation of health, there is cover for legal

liability, provides security to the mortgaged

property, economic independence, there is

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