For economic development, investment are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channeled into investments for economic growth. The Insurance Act has strict provisions to ensure that insurance funds are invested in safe avenues, like Government bonds, companies with record of profits and so on.
The L.I.C is not an exception. All good life insurance companies have huge funds, accumulated through the payments of small amounts of premia of individuals. These funds are invested in ways that contribute substantially for the economic development of the countries in which they do business. The private insurers in India are new and have accumuated funds equal to about one-eight of the L.I.C’s. But even their investments in the various sectors and contributing directly and indirectly to the country’s economic development, would be of similar proportions.
Role Of Insurance In Economic Development
For economic development, investment are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channeled into investments for economic growth. The Insurance Act has strict provisions to ensure that insurance funds are invested in safe avenues, like Government bonds, companies with record of profits and so on.
The L.I.C is not an exception. All good life insurance companies have huge funds, accumulated through the payments of small amounts of premia of individuals. These funds are invested in ways that contribute substantially for the economic development of the countries in which they do business. The private insurers in India are new and have accumuated funds equal to about one-eight of the L.I.C’s. But even their investments in the various sectors and contributing directly and indirectly to the country’s economic development, would be of similar proportions.