Insurance is a contract providing for payment of a sum of money to the person assured or failing him to the person entitled to receive the same on the happening of certain event.Uncertainty of death is inherent in human life. It is this risk, which gives rise to thenecessity for some form of protection against the financial loss arising from death.Insurance substitutes this uncertainty by certainty.The objective of insurance is normally to provide:
Family protection and / or
Provision for old age.
Protection against risks
Insurance cover is essential because it provides the following benefits:
A lump sum payment to the nominees at the time of the death of the policy holder.
A regular payment to the nominees in the event of the death of the policy holder.Tax benefits, as premiums paid reduce the liability of tax.
Relieves economic hardships in the family on the uneventful death of the sole incomeholder.
Inculcates the habit of savings.