The term INSURANCE

The business of insurance is related to protection of economic value of asset. The asset would have created through the efforts of the owners. Every asset has a value. The asset is valuable to the owner, because he expects to get some benefit from it. Every asset is expected to last for a certain period of time during which it will provide the benefit. After that, the benefit may not available. For example there is a life-time for machine in a factory. The owner is aware of this and he can so manage his affairs that by the end of that period or life time, a substitute is made available. Thus, he makes sure that that the benefit is not lost.