PURPOSE OF INSURANCE

Every human being has fear in his mind.

• The fear whether he will be able to meet the basic needs of the life i.e. Food, clothing and Housing (Roti, Kapda and Makkan).
• He has fear not only for himself but also for his dependents.
• The source of income to meet his basic needs may be through service or business.
• If he was able to meet his basis needs then he acquires the assets i.e. vehicles, property or jewellery.
• Then he gets additional fear of saving the assets from destruction. ( The assets may be destroyed through accident, fire or earthquake etc. and the income may be cut off due to certainty i.e. old age and death or uncertainty i e. accident, illness or disability.)
• As you know, the old age and death is certain for every human being while the accident, illness, disability and destruction of assets may be random.
• A certain number of accidents will take place but with whom, it is uncertain.

Therefore, to overcome these problems, the Insurance plays a very important role.

The principal source of income of an individual comes from the compensation for work performed by him. If this source of income gets cut off then:

Family will make social and economic adjustments like:

• Wife may take employment at the cost of home making responsibilities
• Children may have to go for work at the cost of education.
• Family members might have to accept charity from relatives, friends etc. at the cost of their independence and self-respect.
• Family standard of living might have to be reduced to a level below the essentials for health and happiness.