International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 7, Issue 2, pp: (1490-1496), Month: October 2019 - March 2020, Available at: www.researchpublish.com
A STUDY ON INSURANCE AWARENESS IN RURAL AREA OF BARDOLI REGION 1
Shivani Patel, 2Vivek Ayre
1
UKA Tarsadia University, Student, Gujarat
2
Assistant Professor, UKA Tarsadia University, Gujarat
Abstract: The study reveals that the awareness about insurance is low. Insurance companies should reach out to those who are uneducated and the lower age group people, by awareness campaigns like radio and television advertisements. The insurance companies should concentrate more on improving their services. The real growth in life insurance will occur when customers realize the true value of life insurance beyond tax saving. The awareness of insurance as a long term saving should be created both by the government, among the uneducated, low income group and the households having more earning members. Keywords: Insurance, Awareness, Rural Area.
1. INTRODUCTION Rural area is a geographic area that is located out- side the cities. It is considered as any place with a population of not more than 5000 and with a population density of not more than 400 per square kilometer and where, more than 25% of men are engaged in agriculture. Where agriculture and farming is the primary occupation and the existence of poverty is very high. Some times its so happens where the farmers are unable to produce the food grains due to crop failure or any other reasons, there may be less production of milk because of death of cattle, sometimes there may be any risk happening to the farmer or his family member’s health, in such cases they are unable to bare the loss. So insurance is a kind of solution for all such cases. Insurance is a risk transfer mechanism that ensures full or partial financial compensation for the damage or loss caused by events. Insurance is based on trust. Once that is established, its benefits can be better explained. Rural insurance is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss caused by events to the rural people. India is well known for rural areas because more than 70% of the population belongs to rural areas. Most of the rural people are illiterate and they were not aware of insurance. So it is very important to study about rural sector, and bring awareness on insurance accordingly. This study gives basic idea about need, importance and awareness of insurance in rural areas. An agreement or a policy that a person purchases from an insurance company by paying premiums on monthly, quarterly or yearly basis to the insurance company is called insurance. The company protects the police holder or the buyer from any kind of risk or loss that may occur in future, basically it is a risk management scheme by using which the insured person can get protection, against possible eventualities such as financial loss, death, sickness, or loss done to his/her belongings. Insurance is the only financial instrument that helps to manage financial risks smoothly and reduces financial worries. The purpose and need of insurance as a method of transferring risk is to provide economic protection against the losses that may due to uncertain events caused by death of cattle, crop failure, floods or any other economic losses. The loss or risk may or may not occur during the operative time of the contract of insurance. People, therefore, opt for insurance purely for the reasons of uncertainties in life. Insurance helps people in reducing tensions, as the quality of being efficient will improve when the tensions and fears of rural people involving the risks are shifted to the insurer and the financial status of farmers and other rural people remains unaffected by the losses caused by the risks insured. Rural working population also enjoys better credit standing as the risks are transferred to the insurance company. Insurance also provides opportunity for investment as life insurance policies provides maximum benefit of protection and investment because the event insured against is sure to happen, thus life insurance investment offers attractive returns. Insurance sector is playing crucial role in tackling the problem of
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