TOPIC 15: INSURANCE
Describe benefits of insurance
Explain why people buy insurance and what it does for them.
Benefit for individuals, business and society.
Why do you think it’s important for you to have insurance?
Insurance is good for people, businesses, and society in more ways than most people realize. Some of the advantages of insurance are easy to see, but others are not.
Paying for losses is the most obvious and most important benefit of insurance. An insurance policy is a contract that protects people and businesses from losses that are covered by the policy.
The second good thing about insurance is that it helps you deal with uncertain cash flow. Insurance pays for losses that are covered when they happen. So, the chance of having to pay for losses out of pocket is much less likely.
A third, less common benefit of insurance is that it helps people follow the law. Insurance meets legal and contractual requirements and shows that you have enough money to pay for things.
Insurance also helps with risk control, which is a very important benefit. Due to policy requirements and ways to save money on premiums, insurance policies give reasons to start a loss control program.
The fifth benefit of insurance is that it helps an insured make the best use of their resources. Insurance means that you don’t have to save up a lot of money to pay for the financial effects of risks that can be insured against. This lets that money be used in a better way.
The insured’s credit is helped by insurance, which is not a common but important benefit. Insurance makes it easier for people and businesses to get loans by guaranteeing that the lender will get paid back if the loan’s collateral is destroyed or damaged by an insured event. This makes it less likely that the person borrowing money will not pay back the loan.
The seventh good thing about insurance is that it gives you money to invest. Insurance companies collect premiums up front, invest those premiums in a variety of ways, and pay claims when they happen.
The last good thing about insurance is that it makes society lighter. Insurance makes it easier on people who are hurt in accidents and on society as a whole.
Understanding these benefits is important when figuring out if you need insurance, and it helps those who need insurance to justify buying it.
1. List some kinds of insurance you know?
2. What insurance do you or your family have?
3. Some people want to insure unusual things. Singers may ensure their voice; dancers insure their legs. What other examples of unusual insurance cover have you heard about?
4. Should insurance companies cover the medical expenses of people who smoke a lot or drink a lot? Why/ Why not?
5. Many people often make fraudulent claims on their insurance. What do you think about this issue?
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