For economic development, investments are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularity 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 records and so on.

All good life insurance companies have huge funds, accumulated through the payments of small amounts of premium of individuals. These funds are invested in ways that contribute substantially for the economic development of the countries in which they do business. But even their investments in the various sectors and contributing directly and indirectly to the country’s economic development would be of similar proportions.

Apart from investments, business and trade benefit through insurance. Without insurance, trade and commerce will find it difficult to face the impact of major perils like fir, earthquake, floods etc,.. Financiers like banks would collapse if the factory, financed by it, is reduced to ashes by a terrible fire.