Sunday, November 4, 2018

Difference Between Life Insurance And General Insurance

Difference Between Life Insurance And General Insurance
The main dissimilarities or differences between life insurance and general insurance can be pointed out as follows:
1. introduction
Life Insurance: A contract in which the insurer (insurance company) agrees to cover the life risk of the insured (insurance policy holder).
General Insurance: A contract in which the insurer agrees to cover the risk of assets and properties (which are not covered by life insurance policy).

2. Protection

Life Insurance: Protection against human life
General Insurance: Protection against loss to properties or assets

3. Nature

Life Insurance: It is a kind of long term investment
General Insurance: Contract of indemnity

4. Period

Life insurance: Longer period (5 to 25 years)
General Insurance: Shorter Period (generally one year)

5. Principle Of Subrogation

Life Insurance: Not applicable
General Insurance: Applicable

6. Surrender Value

Life Insurance: Yes, it can be surrendered and company provides surrendered value
General Insurance: There will be no surrender value

7. Certainty

Life Insurance: Certain
General Insurance: Uncertain

8. Mode Of Payment

Life Insurance: Premium can be paid quarterly, half-yearly or yearly
General Insurance : Lump sum

   
Also Read: 
Difference Between Insurance And Assurance

9. Premium Calculation

Life Insurance: Premium amount of life insurance policy is determined on the basis of the type of the policy, age and health of the policy holder and duration of the policy.
General Insurance: Premium amount is determined on the basis of  risk of the assets

10. Form/Types

Life Insurance: Endowment policy, whole life policy, money back policy, child policy etc.
General Insurance: Health insurance, fire insurance, motor insurance, marine insurance etc.

Life Insurance Vs General Insurance (Comparison Chart)

Basis For Difference

Life Insurance
General Insurance
Introduction

A legal contract that covers the life risk of the insured person
A legal contract that covers the risk of assets and properties
Protection

Human life
Properties or assets
It Is

Investment
Contract of indemnity
Period

Longer
Shorter
Principle Of Subrogation
Applied
Not applied
Surrender Value

Yes
No
Certainty

Yes
No
Payment Mode

Monthly, quarterly, half yearly or annually
Lump sum
Basis Of Premium

Age and health of the policy holder
Risk and value of the asset
Forms

Endowment policy, child policy, money back policy etc.
Health insurance, fire insurance, marine insurance etc.

I hope this post is helpful to understand the difference between life insurance and general or non life insurance and to make comparison between them.