Insurance based on the ability of measuring the risk in monetary terms. Insurers are covering only the insurable risks. Some risks which are faced by people are unable to insure such risks re.
- Failure of exams, lose of love and affection risks based on personal abilities.
2. stock expiration, depreciation, business risks based on natural causes.
Importance of insurance (necessity of insurance)
Insurance covers business risk. So that, it encourages people to commence business.
It gives a financial security in the event of death, disability of the insured.
Insurance companies re-invest their funds therefore it will contribute to capital formation of economic development
Due to marine insurance international trade will improve rapidly