Understanding Mobile insurance in a better way

Importance of Mobile Insurance

The world we live in is full of uncertainties and risks. Individuals, families, businesses, properties and assets are exposed to different types and levels of risks. These include risk of losses of life, health, assets, property, etc. While it is not always possible to prevent unwanted events from occurring, financial world has developed products that protect gadgets and appliances against such losses by compensating them with financial resources. Mobile Insurance is a financial product that reduces or eliminates the cost of loss or effect of loss caused by different types of risks.

Apart from protecting gadgets and appliances from many kinds of potential risks, the mobile Insurance sector contributes significantly to the general economic growth of the nation by providing stability to the functioning of businesses and generating long-term financial resources for the industrial projects. Among other things, Mobile Insurance sector also encourages the virtue of savings among individuals and generates employments for millions, especially in a country like India, where savings and employment are important

Let’s understand in detail how and why Mobile Insurance as a sector is key to development of any economy.

  • Provides Safety and Security to Individuals and Businesses: Mobile Insurance provides financial support and reduces uncertainties that individuals and businesses face at every step of their lifecycles. It provides an ideal risk mitigation mechanism against events that can potentially cause financial distress to individuals and businesses. ). For instance, with mobile inflation growing at approximately15% per annum, even simple mobile repair cost enough to disturb a well-calculated budget, but a Mobile Insurance would ensure financial security for the family. In case of business insurance, financial compensation is provided against financial loss due to fire, theft, mishaps related to marine activities, other accidents etc.
  • Generates Long-term Financial Resources: The Mobile Insurance sector generates funds by way of premiums from millions of policyholders. Due to the long-term nature of these funds, these are invested in building long-term infrastructure assets (such as roads, ports, power plants, dams, etc.) that are significant to nation-building. Employment opportunities are increased by big investments leading to capital formation in the economy.
  • Promotes Economic Growth: The Mobile Insurance sector makes a significant impact on the overall economy by mobilizing domestic savings. Insurance turn accumulated capital into productive investments. Insurance also enables mitigation of losses, financial stability and promotes trade and commerce activities those results into sustainable economic growth and development. Thus, Mobile insurance plays a crucial role in the sustainable growth of an economy.
  • Spreads Risk: Mobile Insurance facilitates moving of risk of loss from the insured to the insurer. The basic principle of Mobile insurance is to spread risk among a large number of people. A large population gets Mobile insurance policies and pay premium to the insurer. Whenever a loss occurs, it is compensated out of corpus of funds collected from the millions of policyholders.

 

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