Finance – The backbone of the Business

Since the early days of human evolution, Finance is consider backbone of the Business. It’s remain one of the most common and important element in the modern business world. In simple term Finance is the management of money for our financial needs. It’s also called the science of funds management.

Saving money and borrowing money is the base of the finance. Finance is one of the most important aspects of business management. Without proper financial planning a business is unlikely to be successful. Financial management is important to ensure a secure future, both for the individual and an organization.

Finance is also known as a money budget management. The management of finance deals with how money is spent and budgeted. It also deals the concepts of time, money and risk and how they are interrelated.

Finance
Types of Finance

Types of Finance

We can easily categorized Finance in mainly three types –

* Business Finance
In this category finance management main task is to provide the funds for business activities.

* Personal Finance
This type of finance required for personal needs like education fees, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement. Personal financial decisions may also involve paying for a loan, or debt obligations.

* Public Finance
This type of finance worked between countries and states.

 

How Finance worked
In here you can see how finance is worked. A bank accepts deposits from lenders, on which it pays the interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Banks are thus compensates of money flows in space.

 

Insurance – Security of Future against unexpected loss

Insurance can be defined as a form of risk management mainly used to protection against unexpected future loss. In simple term Insurance can be defined as the covered against unforeseen loss. It is a written contract or certificate of insurance in which insurance company promise to reimburse in the case of loss.

Insurance - Security of future
Insurance

In broad term Insurance is a promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance can be used as long term financial investment which can give a person high returns in later years.

Popular terms in Insurance

* Insurer
Also known as Insurance company, is an entity selling the insurance.

* Insured
Well known as policyholder, is the person buying the insurance policy.

* Premium
The amount to be charged for a certain amount of insurance coverage is called the premium.

* Maturity
means ending time of policy.

 

Types of Insurance
In the current business world, there are numerous types of insurance can be find like –

* Life Insurance

* Auto Insurance

* Health Insurance

* Property Insurance

* Disability Insurance

* Business Insurance

* Credit Insurance

* Event Insurance