The insurance industry plays an important role in the financial system by providing indemnification of financial risk in the economy and also serves as an institutional investor for both capital and money market instruments.
Main reasons why insurance matters:
· Protection for you and your family: Your family depends on your financial support to enjoy a decent standard of living, which is why insurance is especially important once you start a family. It means the people who matter most in your life may be protected from financial hardship if the unexpected happens.
· Reduce stress during difficult times: None of us know what lies around the corner. Unforeseen tragedies such as illness, injury or permanent disability, even death – can leave you and your family facing tremendous emotional stress, and even grief. With insurance in place, you or your family’s financial stress will be reduced.
· To enjoy financial security: No matter what your financial position is today, an unexpected event can see it all unravel very quickly. Insurance offers a payout so that if there is an unforeseen event you and your family can hopefully continue to move forward.
· Peace of mind: No amount of money can replace your health and wellbeing – or the role you play in your family. But you can at least have peace of mind knowing that if anything happened to you, your family’s financial security is assisted by insurance.
· A legacy to leave behind: A lump sum death benefit can secure the financial future for your children and protect their standard of living.
Insurance in Pakistan: Insurance in Pakistan is regulated under the Insurance Ordinance, 2000. In the past few years, it has transformed into a developing and fast-growing market that is generally divided into three components: Life Insurance, General Insurance, and Health Insurance. The Government of Pakistan established the Department of Insurance in April 1948 as a department of the Ministry of Commerce; the aim of this department is to take care of affairs related to the insurance industry. The insurance industry in Pakistan is relatively small compared to its peers in the region. The insurance penetration and density remained very modest as compared to other jurisdictions while the insurance sector remained underdeveloped relative to its potential. The Pakistani insurance market has undergone major structural changes in the last few years through mergers of companies to meet the increased statutory requirement of minimum paid-up capital as per Insurance Ordinance 2000. Though with every single day, the need and importance of insurance are increasing in Pakistan so it is equally important to structure Insurance products from Pakistan and its people’s perspective.
Source : Google