Question

In your views, Explain any two primary functions of insurance.

Answer 1

Answer:

The main function of the insurance is to provide protection against the probable chances of loss. The time and amount of loss are uncertain and at the happening of risk, the person will suffer loss in absence of insurance. The insurance guarantees the payment of loss and thus protects the assured from sufferings.

Answer 2

In general terms,insurance refers to protection or security against various kinds of potential risks,uncertainties and adverse situations under the official of the individual/s to be insured.

Explanation:

Primary features of insurance:-

• Insurance usually provides a psychological peace of mind to the insured party by providing a certainty or guarantee of loss or risk coverage.It practically cannot avoid the undesirable or emergency circumstances for the insured party but can certainly guarantee financial replacement or compensation in case of the actual occurrence of the loss or the risk.
• Any official providence of insurance follows the estimation of risk sharing.It construes the extent or magnitude of the risk and the expected number of people it could possibly affect.The insurer can decide the insurance premium accordingly which can be disbursed to the concerned victims or stakeholders.