Traditional Culture Encyclopedia - Traditional stories - What is the function of insurance?
What is the function of insurance?
1. Provide necessary protection: insurance can provide protection for common risk factors such as accidents, health and death, reduce risk losses and effectively resist risks;
2. Risk planning: individuals or families can use insurance tools to plan their lives and transfer possible risks in advance;
3. Rational allocation of funds: insurance is a tool for allocating funds, which has certain investment and can inherit wealth by designating beneficiaries;
4. Leverage: Insurance can exchange a relatively small premium for a higher insured amount. With leverage, the insured can get better protection.
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