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Unit 3: Nature and Scope of Insurance
Rupesh Roshan Singh, Lovely Professional University

Unit 3: Nature and Scope of Insurance Notes

CONTENTS
Objectives

Introduction
3.1 Nature of Insurance
3.2 Functions of Insurance

3.2.1 Primary Functions
3.2.2 Secondary Functions
3.3 Scope of Insurance
3.3.1 Insurance Scope in India

3.3.2 Scope of Insurance Professionals in India
3.4 Insurance, Gambling and Hedging
3.4.1 Comparing Insurance & Gambling

3.4.2 Insurance and Hedging Compared
3.5 Insurance and some Related Terms
3.6 Role of Insurance in Economic Development
3.7 Summary

3.8 Keywords
3.9 Review Questions
3.10 Further Readings

Objectives

After studying this unit, you will be able to:
Discuss the nature of insurance
Explain the functions of insurance

Discuss the scope of insurance
Differentiate between insurance, gambling and hedging
Describe the role of insurance in economic development

Introduction

In the previous unit, you have studied about the need and importance of risk as well as got an
insight about the insurable risk. It also dealt with the types of risks. It has also summarized the
requirements of an Insurable Risk.
This unit will provide you an insight on the nature and scope of insurance as well as the various
functions of insurance. You will be able to differentiate between insurance, gambling and hedging

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