PE insurance policy is an emergence of an insurance firm which has an aim of insuring people of some certain risk that may occur leading to loss or damage. An insurance company has a great impact to the insured as it helps them maintain high living standard even after a risk as occurred. Some of the advantages of pet insurance are;
1. Provides economic protection: Insurance provides economic and financial protections to the insured against the unexpected losses in the consideration of premium.
2. Shares risks: Insurance is a cooperative system which helps to share risk among the insured. Thus, the insurance company reduces the risk of the insured in exchange for small premium.
3. Maintains high standard of living: Insurance provides financial protection against an unexpected risk of losses thus people can maintain high standard of living standards.
4. Creates employment opportunities: Since insurance has become business in modern day, it has provided employment to thousands of people. These may lead people to live a good life and also helps to eradicate poverty.
5. Promotes foreign trade: The growth of the international trade of the country has greatly helped by shifting risk to insurance company. Exporters may devote their full attention towards the promotion of business.
6. Helps to promote business smoothly: A business gets financial compensation in case of loss or damage to the properties of the business through insurance. This encourages people to establish their business as they are encouraged to do so and when they take pe insurance.
7. Helps in economy development: Insurance companies collects premium through life or non-life policies. This premium can be used to invest in various development areas like trade. This enhances high economic growth.
8. Offers loan: The pe insurance company offers loan opportunity to the insured. The insured can also get a loan from other financial institution through the calculated premium.
9. It manages cash flow uncertainty: The pe insurance provides payment for covered losses when they occur. Therefore, the uncertainty of paying losses out of pocket is reduced significantly.
10. Protects liabilities: This insurance company protects against many risk and therefore clients are assured of compensation when a risk or loss arises.
Some of the disadvantages of pet insurance are;
1. It does not give full compensation: PE insurance does not give compensation to all losses. This can cause business not to be insured by the company since he or she will be more financial unstable after the risk.
2. It is time consuming: The PE insurance takes long time to provide financial compensation because of lengthy legal formalities. The procedure of compensation is too long and tiresome which can cause the insured to give up.
3. It does not offer all the facilities: Although PE insurance encourages savings, it does not provide the facilities that are provided by the book. Mostly, insurance company does not offer small rates within a period of time.
4. It may lead to crime in the society: The beneficiaries of the policy may be attacked by robbers which may cause them to avoid insuring. This may discourage people from insuring as they will feel insecure.
5. High premium rate: Sometimes, the total amount of premium might be higher than the policy amount receivable on maturity. This can be a loss to the insured and therefore this will discourage many people from insuring.
6. It always try to compensate less: The pet insurance always try to give very less compensation as possible in order to maximize their profits. This may make people not to be insured by the company as they are afraid the company may fail to compensate them.
7. It adds expenses: In most cases pet insurance are expensive, depending on the risk you insured. This may make one to fail taking up the insurance policy as they are not financial stable to pay for the cover. This will make it not a suitable insurance cover.
8. It is taxable: The indemnity payment through attaining of agreement, proceeds from the insurance which the policy taxable. This makes insured to pay more than the amount they will receive during compensation hence a loss to them.
9. It is very costly: The pet insurance coverage is very expensive and therefore it may limit people who are from low earning level from insuring with them as they will unable to raise the amount required to pay in order to be insured of the risk they needed to insure against.
10. One needs professional business inventor: For a client to be insured with the insurance company, he or she may need a professional person who have general knowledge about the firm and give information and ideas about the firm. This makes it a very big problem to get this advisers and also time consuming to follow all the steps required.